Requirement to correct offshore tax non-compliance [Archived]

The following Private Client practice note provides comprehensive and up to date legal information covering:

  • Requirement to correct offshore tax non-compliance [Archived]
  • What is the requirement to correct?
  • Offshore tax non-compliance
  • Offshore matter
  • Offshore transfer
  • Territorial scope
  • Meaning of tax non-compliance under the requirement to correct regime
  • When does non-compliance occur?
  • Requirement to correct and extended assessment period
  • Requirement to correct and IHT
  • More...

Requirement to correct offshore tax non-compliance [Archived]

What is the requirement to correct?

The legislation for the requirement to correct (RTC) regime is set out in section 67 and Schedule 18 to the Finance (No 2) Act 2017 (F(No 2)A 2017). It required taxpayers who had ‘relevant offshore tax non-compliance’ (ie undisclosed UK income tax, capital gains tax (CGT) or inheritance tax (IHT), liabilities in respect of offshore interests), to correct the position by telling HMRC about the outstanding tax due on or before 30 September 2018.

According to the HMRC RTC guidance, the date of 30 September 2018 was chosen as the final date for corrections as this is the date by which more than 100 countries were due to exchange data on financial accounts under the Common Reporting Standard (CRS). For background information on the CRS, see Practice Note: Automatic exchange of information—the Common Reporting Standard: a summary.

Taxpayers who failed to disclose the relevant information to HMRC on or before 30 September 2018 became liable to a new penalty as a result of their failure to correct (FTC). The FTC penalty is 200% of the ‘offshore PLR’ (potential loss of revenue) attributable to the uncorrected offshore tax non-compliance. The term PLR depends on the nature of the non-compliance.

For information on other tax deadlines, see Practice Note: Tax deadlines.

Offshore tax non-compliance

Offshore non-compliance occurs when there is

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