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HMRC internal manual

Compliance Handbook

Offshore matters: asset-based penalties: identification and valuation of assets: general rules

It is important to be able to correctly identify and value assets for calculating the amount of the asset-based penalty.

The rules for identifying and valuing assets depend on whether the tax at stake is capital gains tax, inheritance tax or income tax.

If an asset-based penalty relates to more than one asset, the rules for identification and valuation is to be determined by the principal tax at stake. 

The principal tax at stake

  • where the penalty (or penalties) relate to only one type of tax, is the tax to which that standard offshore tax penalty (or penalties) relates
  • where the penalty (or penalties) relate to more than one type of tax, is the tax which gives rise to the highest offshore potential lost revenue (PLR) value. To work out offshore PLR values, see CH122160.         

For further information on identifying the principal tax at stake, and for an explanation of the rules on identifying the value of the asset, see CH122330 to CH122360.

For further information on the valuation of an asset that is jointly held, see CH122320.

FA16/Sch 22/Para 10