May traditionally brings flowers, but this year it also brings a new target for HMRC scrutiny in the form of offshore trusts.
This latest move forms part of HMRC’s evasion strategy and so coincides with the announcement that Bermuda and other British overseas territories with financial centres have agreed to share tax information with the UK authorities. This follows similar deals agreed recently with Jersey, Guernsey and the Isle of Man.
Last year, HMRC set out their plans for tackling tax evasion. Pencilled in for May is the identification of offshore trusts that are being used to hide income and wealth overseas, as well as rolling out new data-driven tools to help identify affluent individuals who may be evading tax.
Individuals who fail to inform HMRC of their offshore arrangements could face penalties as high as 200% of the tax outstanding, and also run the risk of criminal prosecution.
Our advice is to start off by making sure you are well aware of what assets you have and where they are. An inventory approach will allow us to help you decide whether there are any compliance issues to be dealt with. Further discussion as to documentary evidence and HMRC’s developing approach to evasion can be found in the latest edition of Talking Tax. As ever, please speak to your normal Hazlewoods Tax contact if you have any questions.