International Tax Compliance RegulationsJan. 4, 2017, 3:39pm
Have you money or other assets abroad?
Recently, the government made changes to international tax compliance regulations that created an obligation on ourselves, as tax advisers, to tell our clients that:
- HMRC will soon be getting data on overseas financial accounts
- there are opportunities to come forward about your overseas tax affairs, if you need to
- and about what could happen to those who don’t come forward.
‘From 2016, HM Revenue & Customs (HMRC) is getting an unprecedented amount of information about people’s overseas accounts, structures, trusts, and investments from more than 100 jurisdictions worldwide, thanks to agreements to increase global tax transparency. This gives HMRC unprecedented levels of information to check that, as in most cases, the right tax has been paid.
If you have already declared all of your past and present income or gains to HMRC, including from overseas, you do not need to worry. But if you are in any doubt, HMRC recommends that you speak to a tax adviser to help you decide now what to do next.’
In addition, HMRC have prepared a ‘Notification Document’ in this regard.
Background to the notifications
Globalisation of the financial sector now makes it much easier for individuals to hold money and assets outside of their country of residence. The UK is party to a number of international agreements designed to provide tax administrations with details of financial accounts and assets, owned by individuals that are resident for tax purposes in one country, but which are held by financial institutions in another country.
For this to work the UK government has introduced legislation that imposes obligations on the UK financial sector to review and collect details of accounts held by persons that are tax resident elsewhere. These details must be reported to HMRC for onward transmission under the exchange of information articles in the various treaties and conventions to which the UK is party. In return, those countries supply HMRC with similar information on UK tax resident individuals holding accounts with their financial institutions.
What do you need to do?
The notification document from HMRC makes it clear (in bold) that, if you are confident your tax affairs are up-to-date and complete, you do not need to do anything further.
However if you have any doubts or queries on this or another tax matter please do hesitate to contact us.