The legislation requires individuals with undeclared offshore tax liabilities, relating to Income Tax, Capital Gains Tax or Inheritance Tax, to 
disclose those liabilities to HMRC before 30 September 2018. On this date more than 100 countries will exchange data on financial accounts under the Common Reporting Standard – this will significantly improve HMRC’s ability to detect offshore non-compliance.
This legislation affects anyone who owns or has an interest in assets held offshore, has a source of income that is offshore or has moved income or the proceeds of capital gains offshore.
Penalties under this piece of legislation are severe and, in all cases, where a standard penalty applies this will be equivalent to 200% of the tax liability. This can be mitigated based on the quality of your disclosure and the level of cooperation.
If you fail to make a disclosure but have a reasonable excuse you will not face a penalty. If you have participated in a tax avoidance scheme (an arrangement where the primary purpose is to gain a tax advantage) taking advice from a third party may not constitute a reasonable excuse.
If the person giving the advice did not have the appropriate level of expertise or received consideration for facilitating your entry into the avoidance arrangement this would not qualify as a reasonable excuse.
Please get in touch if you would like to discuss how this legislation may affect you, if you would like to make a disclosure to HMRC or if you would like to enter into a settlement with HMRC in respect of tax avoidance arrangements. You can also read more about the Requirement to Correct here.
