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The deadline to declare under the Requirement to Correct (RTC) legislation is fast approaching. RTC is the statutory obligation for UK taxpayers with overseas assets to correct any issues with their historic UK tax position. Those who fail to comply by 30th September 2018 face potentially severe financial penalties.
RTC applies to any taxpayer with undeclared UK Income Tax, Capital Gains Tax or Inheritance Tax on overseas assets.
Many taxpayers may not be aware that they have an obligation under this legislation. Renting out a property abroad, transferring an asset between countries or renting out a UK property whilst living overseas are examples that could result in a tax liability in the UK.
The key driver to this legislation is that from 1st October 2018, the UK is one of over one hundred participating countries that will be sharing data under the Common Reporting Standard to augment tax transparency.
The Common Reporting Standard will significantly boost the ability of HMRC to detect offshore non-compliance and, aligned with this, the HMRC will apply the Failure To Correct measures which allows them to apply penalties including:
As a result, we urge anyone with offshore assets to review their affairs to ensure they have been and will continue to be wholly tax compliant.
Offshore assets that typically could generate a tax liability include:
If you discover that you have any undeclared tax due on offshore assets or on UK property income whilst living abroad, it is absolutely essential that you notify HMRC by 30th September of your intention to make a declaration. Once this notification is made, you have ninety days to make the full disclosure and pay any tax owed.
If you are unsure whether a taxable event has occurred, we strongly recommend that you contact your tax advisor for guidance.
At CooperFaure, we are working with clients on these matters and, if you would like to arrange an initial consultation discuss your circumstances, please email us at firstname.lastname@example.org.
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