Commentary

A4.575A Increased penalties for defaults involving offshore matters and transfers

Administration and compliance

A4.575A Increased penalties for defaults involving offshore matters and transfers

A4.575A Increased penalties for defaults involving offshore matters and transfers

The following penalties under the harmonised regime are potentially subject to increased penalty levels:

  1.  

    (a)     penalties for inaccuracies in documents (see A4.530) where:

    1.  

      •     the inaccuracy involves an offshore matter (see below), or

    2.  

      •     (broadly from 2016/17 but see below) the inaccuracy involves an offshore transfer (see below)

  2.  

    and the territory involved is classified as Category 2 or Category 3 (see below)

  3.  

    (b)     penalties for failure to notify liability to income tax and capital gains tax (see A4.540) where:

    1.  

      •     the failure involves an offshore matter, or

    2.  

      •     (as regards an obligation to notify arising in respect of 2016/17 or a subsequent year1) the failure involves an offshore transfer

  4.  

    and the territory involved is classified as Category 2 or Category 3, and

  5.  

    (c)     the second tax-geared penalty for late filing of self-assessment tax returns (see A4.552) where:

    1.  

      •     there is deliberate withholding of information involving an offshore matter, or

    2.  

      •     (as regards returns for 2016/17 onwards2) there is deliberate withholding of information involving an offshore transfer

  6.  

    and the territory involved is classified as Category 2 or Category 3

As regards (a), the extension of the higher penalty levels to inaccuracies involving offshore transfers applies to documents relating to 2016/17 and subsequent years for the purposes of income tax and capital gains tax. As regards documents given to HMRC relating to transfers of value for the purposes of inheritance tax, the extension has effect for transfers of value made on or after

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