If you have recently received a letter from HMRC asking about your overseas assets, income, or gains, you are not alone. HMRC is receiving a vast amount of information about UK residents’ overseas assets, and they are using this information to send out targeted “nudge letters” to taxpayers.
An HMRC nudge letter asks you to review your tax position in relation to your overseas assets. The letter will typically state that HMRC has information that suggests you have overseas assets, and they will ask you to confirm whether this information is correct.
If you do confirm that you have overseas assets, the letter will ask you to complete a “Certificate of Tax Position”. This certificate allows you to confirm that you have been paying the correct amount of tax on your overseas assets, or to amend your tax return if necessary.
What should you do if you receive a nudge letter?
It is important to remember that you are not legally required to sign HMRC’s Certificate of Tax Position. However, it is in your best interests to co-operate with HMRC and to ensure that your tax affairs are in order.
The penalties for failing to disclose overseas assets or income can be severe, extending to 200% of the amount of tax underpaid (in addition to having to pay the tax, plus interest, itself!)
If you have any concerns about overseas assets, or your wider tax position, feel free to get in touch.
Our experienced and approachable team are on-hand to assist you, please get in touch below: