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HMRC letters regarding offshore assets

HMRC letters regarding offshore assets

The Worldwide Disclosure Facility is a HMRC process for those wishing to make a disclosure of offshore matters

The WDF is a HMRC process for those wishing to make a disclosure of offshore matters.

The ‘nudge’ letter

HMRC have sent a ‘nudge’ letter to thousands of individuals in its ‘at-risk’ population – and more such letters are expected during the course of 2019.

The purpose of the letter is to:

  • explain that HMRC has information on an offshore asset held by the recipients
  • request confirmation that their tax affairs are up to date
  • ask for a signed declaration that they know of no inaccuracies in their returns or
  • request confirmation that a tax disclosure will now be made

So what should you do if you receive one?

Firstly, take it seriously. HMRC has found a potential issue in your offshore tax affairs – going back up to 20 years. The anomaly may be easily explained; but HMRC is likely to escalate its enquiries if you don’t reply.

Secondly, where possible, contact HMRC. They may give you more information about the asset in question, which will help focus your review of your tax affairs. However, there’s no guarantee they’ll share anything with you.

And thirdly, take the opportunity to step back. Work with a tax expert to review your offshore assets and ownership structures, ensure that they’re operating effectively, and check that there are no issues that you need to disclose.

Remember: a false declaration could be a criminal offence. Careful consideration and professional advice are essential before responding to a nudge letter, or making a disclosure.

The KPMG team has extensive experience of advising on offshore tax, RTC compliance and disclosures to HMRC including the WDF (the Worldwide Disclosure Facility) which is a HMRC process enabling taxpayers to correct past irregularities in connection with offshore matters.

HMRC has issued (and is continuing to issue) other letters to:

  • tenants and landlords regarding UK properties owned overseas, asking for information to be provided.
  • those suspected of having offshore investment funds, asking people to check Excess Reporting Income and Offshore Income gains have been declared correctly.

You can contact our advisors on 0207 694 4106.

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