Penalties for offshore matters and offshore transfers

By Tolley
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The following Owner-Managed Businesses guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Penalties for offshore matters and offshore transfers
  • Introduction
  • Scope of the offshore matters and offshore transfers penalty regime
  • Additional penalties on top of offshore matters / offshore transfer enhanced penalties
  • Criminal offences ― 6 April 2017 onwards
  • Enablers of offshore tax evasion or non-compliance ― 1 January 2017 onwards

Introduction

Increased penalties are levied where a failure to notify, failure to file a return or an inaccuracy within a return involves an offshore matter or an offshore transfer and the taxpayer’s behaviour is deliberate. The tax arising from the failure must relate to income tax, capital gains tax or (from 1 April 2016) inheritance tax.

Under the rules the maximum penalty can be up to 200% of the tax at stake depending on a number of criteria.

Offshore matters and offshore transfers are becoming increasingly easy for HMRC to track with the signing of a large number of tax information and exchange agreements with a number of tax havens.

For more discussion on the behaviour of the taxpayer, see the Calculating the penalty for inaccuracies in returns ― behaviour of the taxpayer guidance note. For more on whether the disclosure to HMRC is prompted or unprompted, see the Penalty reductions for inaccuracies guidance note. Although these notes relate to penalties which are charged for submitting an inaccurate return, the same principles apply for failure to notify and late filing penalties.

For further reading, see Simon’s Taxes A4.575A.

Scope of the offshore matters and offshore transfers penalty regime

The offshore matters and offshore transfers enhanced penalties apply to:

  • inaccuracies within returns where the tax at stake is income tax, capital gains tax or (from 1 April 2016) inheritance tax,

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