Extending the offshore investigation time limits – a new consultation

HMRC has launched a consultation on the Extension of offshore time limits. This was announced in the Autumn Budget 2017, and now we have the details. The deadline for responding is 14 May 2018. 

The time limits that the government plans to extend relate to non-deliberate non-compliance. At present the limit for HMRC to assess tax in such cases is four or six years. The limit is to be extended to at least 12 years in cases involving offshore income, gains or chargeable transfers. 

There is already a time limit of 20 years for deliberate non-compliance, and the consultation is not looking at this. 

The reason for the change is that HMRC does not consider that the current limits allow sufficient time to establish the tax lost where offshore matters are concerned. One reason for this is the time that may be needed to obtain information from other jurisdictions. 

It seems that the government has settled on the policy and is not inviting comments on whether the limit should be extended. The consultation focuses on the design of the legislation to implement it. 

Some key points in the consulation are: 

  • The new 12-year limit will run from the end of the relevant tax year or accounting period, and will apply where tax is lost through mistake or carelessness.
  • It will cover income tax, capital gains tax and also inheritance tax.
  • It is proposed that it could also apply to corporation tax, because offshore structures often involve corporate entities.
  • Where both offshore and onshore tax matters are concerned, the longer time limit would apply only the offshore-related tax.
  • The intention is that it will come into effect from April 2019. 

The Tax Faculty will be responding – if you have any comments, please contact Jane.Moore@icaew.com 


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  • Whether a UK national & UK resident also holding another nationality (on birth) and inherited property/assets prior to being UK resident & UK national is liable to investigation if the off shore property/assets have not been disclosed to UK Inland Revenue?  

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