overseas assets

Taxpayers with overseas assets: What you need to know

Time is running short for taxpayers with overseas interests to ensure they are meeting their UK tax obligations. Under the new rules – which come into effect on 30 September – those with offshore assets such as holiday homes may incur costly penalties if they aren’t declaring their tax liabilities. The regime, called ‘Requirement to Correct’, could see those with undeclared tax face penalties of up to three times the amount of tax they should have paid.

Who is affected?

If you receive income from holiday lets, investments, trusts or bank accounts based outside the UK, you are likely to be affected. Similarly, if you’re a British expatriate with overseas interests that incur a UK tax liability, you will probably need to act. We strongly recommend a tax planning health check for those with offshore assets, in order to ensure compliance and avoid the heavy penalties.

What should you do?

If you have overseas interests, it’s advisable to check your historic and current tax position and ensure you’re meeting your obligations – even if you’re confident everything is in order. Should you find a discrepancy, all you have to do is notify HMRC of your non-compliance by 30 September. After this, you have 90 days to submit the full disclosure and payment. By doing so, you will only need to pay the tax owed and interest, plus the existing penalty, which may be as low as 10 percent.

What happens if you don’t disclose by 30 September?

If irregularities in your tax liability are not declared by this date, the penalties are far more severe. The standard penalty you incur for undeclared tax may be as much as 200 percent, and should the underpaid amount exceed £25,000, there will be an additional ‘asset-based’ penalty. This could be as much as 10 percent of the value of the related assets.

If HMRC decides that assets of funds have been moved offshore to avoid UK tax liability, an extra 50 percent of the standard owing charge applies. This could land you with a total penalty of 300 percent, plus the tax owed.

The penalties apply where there is Income Tax, Inheritance Tax or Capital Gains Tax owed for overseas interests existing at 5 April 2017. While HMRC may reconsider penalties for reasonable excuses – such as acting on professional advice that has led to unwittingly underpaying – the process for appeal is complex.

Take action today

If you still need to check your tax position, we at Charter Tax can help. As an established accountancy practice in Kent, we offer international tax services in Goudhurst and across the county. We’ll be happy to help you ensure you have no outstanding taxes to pay, and that you can meet 30 September with complete peace of mind.


The information provided by Charter Tax Consulting Limited is general in nature and does not constitute specific tax advice. Professional advice should be sought before deciding on a course of action, or refraining from a certain action, arising from the above information. Tax legislation changes regularly and information contained herein is provided based on legislation as at 17 September 2018.

Taxation planning concerns the application of complex statute and case law to future events. Accordingly, however expert the opinion given, it is always possible that the Courts will take a different view of the application of the law. We undertake to apply reasonable care and skill in the provision of advice. We do not guarantee that tax planning steps will in all circumstances achieve a certain legal effect.

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