Finance (No 2) Act 2017 introduced a new obligation for taxpayers to ensure that undeclared UK tax liabilities in respect of offshore interests relating to all periods up to and including 5 April 2017 are fully disclosed to HM Revenue & Customs (HMRC) before 30 September 2018.
This means there is a limited window of opportunity to correct any offshore tax irregularities before then.
Requirement to Correct (RTC)
Broadly speaking, if you have any undeclared tax liabilities as at 6 April 2017 (income tax, capital gains tax or inheritance tax) which relate to offshore matters or offshore transfers, the new legislation requires you to disclose them to HMRC before 30 September 2018.
Failure to Correct (FTC)
If you fail to correct historic offshore tax irregularities by the cut-off date of 30 September 2018, any related understatements of tax subsequently coming to light (regardless of whether you disclose them voluntarily after 30 September 2018 or HMRC discovers them) will bear penalties under the new FTC regime.
What you should do next
The penalties for failing to correct by 30 September 2018 are extremely harsh. It is therefore vital that you consider your tax affairs to ensure that they are up to date.
If you have reviewed your offshore tax affairs and would like some assistance or would like a review of your affairs carried out, please let us know by using our enquiry form.
For more information on the RTC, including information on the levels of penalties, please read our latest article on the subject.