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HMRC internal manual

Compliance Handbook

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HM Revenue & Customs
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Penalties for failure to file on time: types of penalty for failure to file on time: occasional returns and returns for periods of 6 months or more: 12 month further penalties: offshore matter: offshore asset move penalty overview

Amount of penalties involving an offshore matter

This guidance covers penalties under Schedule 21 FA 2015 known as offshore asset move penalties. These penalties are different penalties from those under Schedule 55 FA 2009, but only apply if there is an underlying penalty under Schedule 55. There are similar provisions in relation to Schedule 41 FA 2008 and Schedule 24 FA 2007 penalties, see CH73218 and CH82489 respectively.

If you think that a person is liable to an offshore asset move penalty under Schedule 21 FA 2015 you must first discuss the case with your manager and then make a report to Central Policy, Tax Administration Advice (TAA). See CH62292 for the action to take.

A person may be liable to an offshore asset move penalty if all the following conditions apply

  • The person is liable to a penalty for a deliberate failure to make a return or deliver a document under Schedule 55 FA2009 - this is the underlying penalty.
  • The tax at stake in relation to the underlying penalty is income tax or capital gains tax
  • There is a relevant offshore asset move connected with the failure that led to the underlying penalty.
  • The relevant offshore asset move occurred after 26 March 2015.
  • The relevant offshore asset move occurred after the relevant time.
  • The main purpose or one of the main purposes of moving the asset to another territory was to prevent or delay discovery by HMRC of the failure that led to the underlying penalty.

Amount of the penalty

The offshore asset move penalty is 50 per cent of the amount of the underlying penalty and is in addition to that underlying penalty.

Relevant offshore asset move

A relevant offshore asset move occurs if an asset or a person who holds an asset moves from a specified to a non-specified territory, or if there is a change in the ownership arrangements of an asset which results in the beneficial owner prior to the move remaining the beneficial owner afterwards.

Any second or later asset purchased with proceeds of sale from the original asset is treated as the original asset when determining whether a relevant offshore asset move has occurred.

The specified territories are set out in The Offshore Asset Moves (Specified Territories) Regulations 2015 (S.I. 2015/866). Any territories not specified in the Statutory Instrument are non-specified territories.

Relevant time

For income tax or capital gains tax in relation to a penalty for failure to make a return under Schedule 55 FA 2009, the relevant time is the start of the year to which the return relates.

Legislation

This legislation is in Schedule 21 FA 2015.

Commencement date

Schedule 21 FA 2015 applies to relevant asset moves that take place after 26 March 2015.