You are here: Home - Saving-Banking - News -

Overseas asset owners: time’s ticking to declare unpaid tax

0
Written by: Paloma Kubiak
07/09/2018
If you own and rent property overseas or hold offshore accounts, you could face a hefty penalty if you fail to declare and pay tax on your earnings.

HM Revenue & Customs (HMRC) ‘Requirement to Correct’ rules require UK taxpayers to declare and settle any tax relating to offshore assets before 30 September.

This includes interest from a foreign bank or savings account or overseas shares, rent from a holiday home, as well as income or gains from a trust abroad.

If HMRC discovers unpaid tax, you could be hit with a default penalty of 200% of the tax due, reduced to 100% if you co-operate with the authority. However, this still amounts to a double tax charge.

Further, HMRC has the power to name and shame individuals who fail to pay up, if their liabilities amount to £25,000 or more.

Accountancy and tax planning firm Menzies LLP, warned that HMRC is gaining more access to data, which is shared across jurisdictions. Under the ‘Common Reporting Standard’, transactions relating to any Airbnb properties owned by UK residents will be visible to HMRC.

Russell Dickie, senior manager and tax planning specialist at Menzies LLP, said: “Some Airbnb property owners resident in the UK could be caught out by this regime, which is targeting unpaid tax liabilities, relating to offshore assets, dating back to 1998.

“For example, even if a UK resident has been renting out an overseas property for just a few weeks per year, these earnings must be disclosed to HMRC each year. If this has not been done properly in the past, then a penalty will be applied to the total amount of tax due, which could add up to a significant lump sum.

“Alternatively, individuals may have come to live in the UK and be unfamiliar with the domestic tax system. For example, many offshore jurisdictions don’t charge tax for non-local income and gains, and individuals taking up residency in the UK could wrongly assume that the same rules apply here. In other situations, non-doms who are UK residents could have received inaccurate or incomplete advice in this area and be unaware of their liabilities.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Autumn Statement: Everything you need to know at a glance

Yesterday Chancellor Jeremy Hunt made his first fiscal statement in the role, outlining a range of tax measure...

End of Help to Buy: 10 alternatives for first-time buyers

The deadline for Help to Buy Equity Loan applications passed on 31 October. If you’re a first-time buyer who...

Moving to an energy prepayment meter: Everything you need to know

As households struggle with the soaring cost of energy, tens of thousands of billpayers are expected to move o...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week