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Offshore assets and foreign income

16 December 2020

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No matter where your money and assets are, if you are UK resident and domiciled you must pay UK tax on all your income and gains worldwide. There may be some differences if you are not UK domiciled, but the rules are complex and frequently change.

HMRC is addressing the risk of undeclared offshore income systematically, which includes issuing a large volume of nudge letters to taxpayers where HMRC have received information about offshore assets. We can advise how best to approach these letters and assist with any response(s) required on your behalf.

Common Reporting Standard

The OECD, working with the G20, developed a Common Reporting Standard (CRS) for the automatic global exchange of financial information. Since September 2018 over 100 countries (including former ‘tax havens’) exchange information annually. HMRC analyses the data it receives, comparing it to tax returns and other information it already holds, to identify taxpayers to investigate.

View our interactive map to get a wider picture of global adoption of the CRS.

Requirement to Correct

HMRC introduced the ‘Requirement to Correct’, which obliged taxpayers to disclose irregularities relating to offshore assets and foreign income before 30 September 2018.  Failure to fully disclose will result in penalties of at least 100% of the tax in the absence of a ‘reasonable excuse’. If you have received a letter referencing the Requirement to Correct, get in touch.

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