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This publication is available at https://www.gov.uk/government/publications/ten-things-about-offshore-assets-and-income/ten-things-about-offshore-assets-and-income
1. What is offshore income?
Income is considered ‘offshore income’ if it comes from a territory outside the United Kingdom. It includes:
- interest from overseas bank or building society accounts
- dividends and interest from overseas companies
- rent from overseas properties
- wages, benefits or royalties earned outside the UK
2. It is important for UK taxpayers to declare offshore income
If you are a UK resident, you are breaking the law if you fail to tell HM Revenue and Customs (HMRC) about your taxable offshore income. HMRC is getting tougher on those who try to evade tax by hiding their assets or income offshore. We are increasing the size and range of penalties charged, and increasing the number of prosecutions of serious evaders.
3. If you’re unsure, we’re here to help
If you’re having trouble working out whether you have paid the right amount of tax or have offshore income you need to declare, you can either get help from HMRC or consult a tax adviser. For further information please read Get help with tax.
4. Previous advice may be outdated
Because laws and specific circumstances can change, advice that you took in the past may no longer be valid. HMRC has unfortunately seen taxpayers who’ve sought guidance in good faith, get caught out because they received poor or even incorrect advice. It’s important to check your tax affairs regularly.
5. Where do you normally pay tax?
If you’re not resident in the UK for tax purposes you won’t usually be liable to pay tax in the UK on your offshore incomes and gains but it’s important to check your residency status and what’s taxable from offshore income.
6. There are ways to tell HMRC about any untaxed worldwide income
If you’re concerned that you are not paying the right amount of tax you can tell HMRC and may be able to use one of our disclosure facilities. You will still pay the tax that is legally due in full, alongside penalties and interest.
7. We’re bringing in tougher penalties for evasion
The existing disclosure facilities which you can use to get your affairs in order will be closing on 31 December 2015. After this date, you will still be able to tell HMRC about any undeclared offshore assets or income, but penalties will be tougher. If you’re concerned, now is the time to come forward.
8. A new international agreement will make it harder to evade tax on offshore income
HMRC will soon be receiving more information about international investments and financial structures held offshore by UK tax residents. Over 90 countries and jurisdictions have already committed to exchange this data.
9. HMRC is cracking down on those who help others to evade tax offshore
New laws will punish the enablers of evasion, not just the evaders themselves. Enablers can face civil penalties, criminal prosecution and public naming.
10. There is nothing wrong with having investments overseas
As long as you declare all taxable income and gains on your UK tax return you have nothing to worry about. If you are confident that your tax affairs are up to date, you don’t need to do anything further. If you are unsure, we recommend that you speak to an adviser.