Penalties for offshore matters and offshore transfers

Produced by Tolley
Penalties for offshore matters and offshore transfers

The following Owner-Managed Businesses guidance note Produced 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
  • What is an offshore matter?
  • What is an offshore transfer?
  • Maximum penalty percentages
  • Categorisation of territories
  • Quantum of penalty
  • Disclosure of additional information
  • Interaction with requirement to correct
  • More...

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 introduction of various automatic exchange of information agreements, including the common reporting standard. See IEIM402340 for the list of jurisdictions that report information to HMRC.

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 of penalties for offshore matters and offshore transfers, 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:

  1. inaccuracies within returns where the tax at stake is income tax, capital gains tax or (from 1 April 2016) inheritance tax, see the Penalties for inaccuracies in returns ― overview guidance note

  2. failure to notify chargeability where the tax at stake is income tax or capital gains tax, see the Penalties for failure to notify guidance note

  3. failure to file a return where the tax at stake is income tax, capital gains tax or (from 1 April 2016) inheritance tax ― the enhanced penalties only apply if the tax return is over 12 months late, see the Penalties for late filing guidance note

FA 2007, Sch 24, Part

Popular documents