The ‘requirement to correct’ legislation comes into force on 30 September 2018 and requires UK taxpayers to notify HMRC of any offshore tax liabilities relating to UK income tax, capital gains tax or inheritance tax.
HMRC are urging taxpayers to come forward and declare foreign income and profits on offshore assets before 30 September 2018 in order to avoid higher penalties. A news release warning taxpayers about the need to notify is available on the Gov.uk website.
It is important that clients understand when they have a requirement to declare overseas financial interests, as many will be unaware of their obligation to do so. Under the rules, actions like renting out a property (including renting out a UK property when abroad) or transferring income and assets from one country to another may mean that the taxpayer faces a tax bill in the UK.
From 1 October 2018, more than 100 countries, including the UK, will be able to exchange information under the Common Reporting Standard.