Your offshore assets, income and gains – HMRC using ‘nudge letters’ to prompt disclosures
Specialist Taxation Services (Europe) Limited (STS Europe) have observed an increase in clients approaching the firm to seek advice on HMRC correspondence relating to their offshore assets.
Common Reporting Standard (CRS) is an information standard for the automatic exchange of information regarding bank accounts on a global level, between tax authorities. HMRC have recently issued a large number of ‘nudge letters’ following the vast exchange of information, requesting for people to review the offshore income and gains they have declared. Taxpayers must confirm that they have no undeclared overseas income and gains or alternatively, commit to bringing their affairs up to date through the Worldwide Disclosure Facility (WDF).
It is possible that some taxpayers may have unknowingly failed to declare a gain or income. This could represent the sale of a property or rental income where tax has been paid in another country, where the property is resident, and the client is not aware there is still a tax liability in the UK.
Clients must therefore determine all assets they hold offshore which may have generated any income or capital gain. STS Europe provide disclosure services for prospective clients with tax irregularities or can clarify clients of their UK tax position, if required. Correspondence with HMRC on a clients behalf can also be provided, regardless of whether there is nothing further to be declared, or a disclosure needs to be made.
STS Europe will guide clients through the most appropriate disclosure given the individual’s circumstances, should a disclosure be required. Whilst the letter specifically states that ‘you must register with the Worldwide Disclosure Facility’, this is not strictly correct. There are various other disclosure channels the individual can use, the WDF is not always the most appropriate process.
Given the complexities of the UK tax legislation, particularly in respect to offshore matters, we encourage all relevant individuals to review their tax affairs regularly.
If you need advice in relation to the letter, a review of your prior and present tax affairs i.e. a ‘tax health check’, or assistance with making a full disclosure to HMRC, please contact our offices.