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HMRC internal manual

Compliance Handbook

Offshore matters: asset-based penalties: definitions: standard offshore tax penalty

If HMRC charge a standard offshore tax penalty, the person may also be liable to an asset-based penalty.

A standard offshore tax penalty is a penalty that has been imposed for a deliberate failure or inaccuracy and falls within:

  • Schedule 24 FA 2007 paragraph 1 - Inaccuracy in taxpayer’s document, where the tax at stake is (or includes) capital gains tax, inheritance tax, or asset-based income tax.
  • Schedule 41 FA 2008 paragraph 1 – Failure to notify, where the tax at stake is (or includes) capital gains tax, or asset-based income tax.
  • Schedule 55 FA 2009 paragraph 6 – Penalty for failure to make a return more than 12 months after the filing date, where the tax at stake is (or includes) capital gains tax, inheritance tax, or asset-based income tax.

If the underlying penalty was based on both an offshore matter or transfer, and a domestic matter, the standard offshore tax penalty is only that part of the penalty that involves the offshore matter or offshore transfer. Details on how this calculation should be carried out are at CH122170.

If the tax at stake used to calculate the underlying penalty includes tax other than capital gains tax, inheritance tax, or asset-based income tax, the standard offshore tax penalty is only that part of the penalty which relates to capital gains tax, inheritance tax or asset-based income tax.

Asset-based income tax means income tax that is charged under any of the provisions mentioned in FA2016 Sch22 paragraph 13(2), see CH122110.