Requirement to correct offshore tax non-compliance
Requirement to correct offshore tax non-compliance

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

  • Requirement to correct offshore tax non-compliance
  • What is the requirement to correct?
  • Offshore tax non-compliance
  • 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 inheritance tax
  • Liability of companies under the requirement to correct regime
  • Penalties
  • Reasonable excuse
  • more

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 requires taxpayers who, at the end of the 2016–17 tax year have ‘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.

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 will 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.

Failure to disclose the relevant information to HMRC on or before 30 September 2018 will result in the person becoming liable to a new penalty as a result of their failure to correct (FTC). The new FTC penalty is likely to be much higher than the existing penalties, with a minimum penalty of 100% of the tax involved.

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

Offshore tax non-compliance

Offshore non-compliance occurs when there is