Time running out for taxpayers to declare offshore income

Taxpayers with undeclared income generated from offshore assets and investments have just weeks in which to declare their earnings or face punitive fines, financial experts have warned.

Warning issued by Ian Williams of Campbell Dallas. Picture: Fraser Band

A failure to comply with new regulations could see individuals stung with a standard penalty of 200 per cent of underpaid taxes, a surcharge of 50 per cent for deliberate avoidance and the prospect of being named and shamed.

However, Ian Williams, a partner with accountancy firm Campbell Dallas, said taxpayers and trusts with undeclared income can take advantage of a disclosure window before the rules come into force on 1 October.

He said: “Disclosure will apply to undeclared offshore income, assets, transfers and investments, and the applicable taxes include income tax, capital gains tax and inheritance tax.

“Qualifying disclosures will be subject to interest charges and the ‘general’ penalty regime, ranging from zero to 30 per cent, but deliberate behaviour will attract significantly higher penalties. In the latter category, taxpayers or trusts should seek urgent assistance to notify HMRC.

He added: “If HMRC has not received disclosures by 30 September, the new punitive regime comes into force. With global sharing of data, HMRC is increasingly aware of offshore investments and assets, and therefore of the income that is being generated.”