UK: HMRC Readies Crackdown on HNW Offshore Fund Holders.

As published on citywire.co.uk, November 4, 2019.


Wealthy UK offshore fund holders are to be targeted by the HMRC in a new probe of compliance and tax transparency.

According to a technical note issued by the Chartered Institute of Taxation, revenue authorities dealing with wealthy people and mid-sized businesses are preparing a ‘bulk mailing’ of letters.

The letters will ask recipients to ‘check that they have correctly declared money received from offshore collective investment funds’ in the latest of a series of specialist compliance crackdowns.

Chartered tax adviser at law firm Harbottle & Lewis Gary Ashford said: ‘It has long been the case that significant tax issues can arise from such investments.

‘Given that the UK has just been through a campaign to report all offshore income and gains correctly or face 200% penalties I would urgently advise such investors to double check these matters have been correctly dealt with.’

HMRC’s yield from investigations into ‘wealthy individuals’ rose by 58% last year, according to law firm Pinset Masons.

The sharp increase has been attributed to investigations following the Panama Papers leak, which alone yielded £190 million, and new global data sharing agreements allowing the tax authority to identify cases more quickly.

HMRC gained £1.9 billion from tax investigations in the 2018/19 tax year, up from £1.2 billion the previous year. Pinset Masons says that there are a further 215 similar investigations still ongoing.

HMRC started receiving cross-border information last October via the common reporting standard (CRS), which will have aided in investigations. Over 100 countries have now signed up to CRS to share financial data.

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