Skip to content
Law Society of Scotland
Search
Find a Solicitor
Contact us
About us
Sign in
Search
Find a Solicitor
Contact us
About us
Sign in
  • For members

    • For members

    • CPD & Training

    • Membership and fees

    • Rules and guidance

    • Regulation and compliance

    • Journal

    • Business support

    • Career growth

    • Member benefits

    • Professional support

    • Lawscot Wellbeing

    • Lawscot Sustainability

  • News and events

    • News and events

    • Law Society news

    • Blogs & opinions

    • CPD & Training

    • Events

  • Qualifying and education

    • Qualifying and education

    • Qualifying as a Scottish solicitor

    • Career support and advice

    • Our work with schools

    • Lawscot Foundation

    • Funding your education

    • Social mobility

  • Research and policy

    • Research and policy

    • Research

    • Influencing the law and policy

    • Equality and diversity

    • Our international work

    • Legal Services Review

    • Meet the Policy team

  • For the public

    • For the public

    • What solicitors can do for you

    • Making a complaint

    • Client protection

    • Find a Solicitor

    • Frequently asked questions

    • Your Scottish solicitor

  • About us

    • About us

    • Contact us

    • Who we are

    • Our strategy, reports and plans

    • Help and advice

    • Our standards

    • Work with us

    • Our logo and branding

    • Equality and diversity

  1. Home
  2. For members
  3. Journal Archive
  4. Issues
  5. August 2018
  6. Sands run out on offshore interests

Sands run out on offshore interests

Taxpayers now have less than two months to ensure their affairs in relation to any offshore assets are in order as respects HMRC, or face severe penalties
13th August 2018 | Kenny MacDonald

There are now around two months until time runs out to comply with HMRC's Requirement to Correct (RTC) rules.

Over the past 10 years, HMRC has put together various beneficial disclosure programmes to encourage people to regularise their offshore tax affairs. RTC – and the very strident penalties they introduce – signals a sharp move away from this approach.

With the recent addition of things such as the common reporting standard (CRS), HMRC will have huge visibility of UK residents' worldwide investments from October 2018, the likes of which has never previously been available to them. CRS alone will see more than 100 countries sharing details of individuals' assets and income.

Penalty regime

HMRC will introduce very serious fines for irregularities in offshore tax affairs from 1 October 2018.

Penalties will start at 200% of any undeclared tax liability on offshore issues. They can be reduced, but not below 100%. Of course, in addition to this, you will also need to pay the unpaid tax and statutory interest that is owed.

The financial charges aren’t the only sanction available to HMRC. Individuals who fail to comply can be “named and shamed” on its website.

The RTC rules cover errors and oversights, as well as what HMRC judges to be a lack of “reasonable care” or deliberate tax evasion. And, they can apply not just to individuals, but also to trustees and companies.

Ignorance is not bliss

RTC could affect many individuals who might not even realise that it applies to them.

They may have declared offshore income each year. However, where HMRC can show that they have made technical errors when doing so, or are deemed not to have not taken reasonable care, they will fall foul of the regulation.

As such, the unwary could be hit with potentially huge fines for failing to correct liabilities by 30 September 2018 – unless they have a “reasonable excuse” for not having done so. For the purposes of RTC, HMRC may not consider following the advice of a professional tax adviser to be a reasonable excuse.

Time to act

With the RTC deadline fast approaching, time to take action is running out.

If you have investments or bank accounts outside the UK, we would advise that you take action now to ensure you are comfortable that everything is in order; don’t wait to see if HMRC finds fault.

For additional comfort you may seek a review of your offshore tax position as soon as possible.

The aims of this review should be to:

  • identify any inherent risks in your offshore financial affairs;
  • clarify how these are being managed;
  • consider any arrangements HMRC might challenge;
  • review these to make sure your tax position is robust.

If your evaluation highlights any irregularities, you'll need to make a voluntary disclosure by 30 September 2018.

We would strongly recommend seeking the advice of a tax adviser when reviewing your offshore investments and when considering any relevant disclosures. The technicalities involved are complex and the tax years to be included in disclosures will depend on your past behaviour, as will any penalties imposed.

The Author

Kenny MacDonald is director of Tax Services with Turcan Connell
Share this article
Add To Favorites
https://lawware.co.uk/

In this issue

  • Acting in the best interest of the company?
  • Social housing: the ground rules change
  • Supporting your EU staff
  • Sands run out on offshore interests
  • Familiar faces not welcome
  • Reading for pleasure
  • Opinion: Pol Clementsmith
  • Book reviews
  • Profile: Robert Rennie
  • President's column
  • Moving from Registers Direct to ScotLIS
  • People on the move
  • Good on paper?
  • When 1 + 1 = 3
  • Voice of the child
  • Curators ad litem: who pays, and for what?
  • Limits of a course of conduct
  • Asleep on the job?
  • Affidavits – essential reading
  • Prisoner privacy proportionality
  • Not just a matter of form for employers
  • Scottish Solicitors' Discipline Tribunal
  • Keep your beneficiary nominations up to date
  • See-through titles: setting the scene
  • In-house traineeships: time for an in-depth look
  • Public policy highlights
  • Paralegal pointers
  • Police interview advice: a skill to learn
  • Swimming, not sinking
  • The lawyer and the geek
  • Ask Ash

Recent Issues

Dec 2023
Nov 2023
Oct 2023
Sept 2023
Search the archive

Additional

Law Society of Scotland
Atria One, 144 Morrison Street
Edinburgh
EH3 8EX
If you’re looking for a solicitor, visit FindaSolicitor.scot
T: +44(0) 131 226 7411
E: lawscot@lawscot.org.uk
About us
  • Contact us
  • Who we are
  • Strategy reports plans
  • Help and advice
  • Our standards
  • Work with us
Useful links
  • Find a Solicitor
  • Sign in
  • CPD & Training
  • Rules and guidance
  • Website terms and conditions
Law Society of Scotland | © 2025
Made by Gecko Agency Limited