The HMRC is urging UK taxpayers to declare foreign income or profits on offshore assets to avoid higher penalties.
New legislation called ‘requirement to correct’ requires UK taxpayers to notify HMRC about any offshore tax liabilities relating to UK income tax, capital gains tax, or inheritance tax.
However, some UK taxpayers may not realise they have a requirement to declare their overseas financial interests before 30 September.
Under the rules, actions like renting out a property abroad, transferring income and assets from one country to another, or even renting out a UK property when living abroad could mean taxpayers face a tax bill in the UK.
Other examples of offshore assets include art, bank and other savings accounts, boats, life assurance policies and pensions.
“Since 2010 we have secured over £2.8bn for our vital public services by tackling offshore tax evaders, and we will continue to relentlessly crack down on those not playing by the rules.
“This new measure will place higher penalties on those who do not contact HMRC and ensure their offshore tax liabilities are correct. I urge anyone affected to get in touch with HMRC now,” the financial secretary to the Treasury, Mel Stride, said in a statement.
From 1 October more than 100 countries, including the UK, will be able to exchange data on financial accounts under the Common Reporting Standard (CRS).
CRS data will enhance HMRC’s ability to detect offshore non-compliance and it is in taxpayers’ interests to correct any non-compliance before that data is received, as reported by International Investment.
More than 17,000 people have already contacted HMRC to notify the department about tax due from sources of foreign income, such as their holiday homes and overseas properties.
Once a taxpayer has notified HMRC by 30 September of their intention to make a declaration, they will have 90 days to make the full disclosure and pay any tax owed.
If someone is unsure, HMRC recommends they seek advice from a professional tax adviser or agent.
