In a press release published today, HMRC has warned UK taxpayers that failure to declare any foreign income or profits from offshore assets before 30th September could result in high tax penalties.

 ‘Requirement to Correct’ legislation requires UK taxpayers to notify HMRC about any offshore tax liabilities relating to UK income tax, capital gains tax, or inheritance tax.

Alarmingly, many British taxpayers are still unaware of the necessity to declare off-shore assets, such as:

  • art and antiques
  • bank and other savings accounts
  • boats
  • cash
  • debts owed to you;
  • gold and silver articles
  • government securities
  • jewellery
  • land and buildings, including holiday timeshare;
  • life assurance policies and pensions
  • other accounts, such as stockbrokers or solicitors’;
  • other bond deposits and loans including personal portfolio bonds
  • rights or intellectual property including image rights
  • stocks and shares
  • trusts including employee benefit trusts and self-employed persons trusts
  • vehicles

Under the rules, 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.

As of the 1st October, the UK and over 100 other countries who have joined forces to form the Common Reporting Standard (CRS) will begin exchanging data on financial accounts. This will significantly enhance HMRC’s ability to detect offshore non-compliance and will close a large hole in the tax avoidance net.

Over 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 and it is advisable for those who are yet to do so to follow suit very soon.

To read the press release, which includes further information on how to declare you off-shore assets or find out what to do next, click HERE.