Offshore trusts are coming under increased HMRC scrutiny. This increased activity follows recent announcements that overseas territories including Jersey, Guernsey and the Isle of Man have agreed to share information with UK authorities.
Last year HMRC set out plans for tackling tax evasion and provided details of the monthly activity they would be undertaking. For May 2013 HMRC committed to identifying offshore trusts that were being used to hide income and wealth overseas, as well as implementing new data focused tools to identify wealthy individuals who are evading tax.
Individuals who fail to inform HMRC of offshore arrangements or unpaid UK tax liabilities could face penalties as high as 200% of unpaid tax, as well as running the risk of criminal prosecution.
David Nash, Partner at Magma said: “Individuals and other entities with offshore assets, in trust arrangements or otherwise, should seek advice to ensure that they have been compliant with their UK tax filing and payment obligations and if they haven’t been, should urgently seek advice regarding their options for disclosure to HMRC”.