How we helped a widowed lady in her 80s declare income from overseas savings and rental property to HMRC through the Worldwide Disclosure Facility. With Bedrock's assistance the penalties due were kept to the statutory minimum of 20% rather than 50% which could have been the outcome.

The lady in question was referred by her accountant. He had been appointed to deal with her tax returns as she was in receipt of rental income from her family home when she moved in with her daughter. As part of the process of gathering information for the tax return he became aware of interest arising on funds held in UK accounts for the first time.

Client challenge:

When the accountant asked where the funds had been held previously he was told that for over 30 years funds had been held in Swiss and latterly Israeli bank accounts. None of the income and gains arising overseas had been declared and no UK tax had been paid. We advised the client that she needed to make a disclosure of the taxable income and gains that had arisen in previous years to HMRC.

How did Bedrock help?

In all disclosure work it is important to provide HMRC with all the facts. We reviewed the bank accounts for a number of years, although the client was not able to obtain statements for all the accounts going back to when the accounts were originally opened.

We considered HMRC’s assessing position based on the facts of the case and calculated the income and gains in the years for which we considered HMRC had a valid assessing position. Following this we submitted a full disclosure to HMRC using the Worldwide Digital Disclosure facility.

Business impact and benefits:

Unsurprisingly the lady concerned and her family, were very anxious about the potential exposure to fines and penalties from HMRC; we provided clarity and peace of mind for the client. Based on our understanding of the facts and our knowledge of HMRC’s assessing position we were able to limit the client’s taxable position to the last six years rather than the 30 years in which the income and gains had been under declared.

By using the online Worldwide Disclosure Facility, we were able to make an unprompted disclosure which reduced the potential penalty position for the client. As the facts were fully disclosed this meant that penalties were kept to 20%; the statutory minimum when tax has been due for more than 12 months. Penalties could have been as high as 50%. HMRC accepted disclosure submitted and asked no questions.

Get in touch today if you’d like to discuss how we can help with making disclosures to HMRC. You can read more about making disclosures to HMRC here.

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