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HMRC internal manual

Compliance Handbook

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HM Revenue & Customs
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Penalties for failure to notify: penalty reduction for quality of disclosure: maximum and minimum penalties for failure to notify involving an offshore matter and income tax and capital gains tax: offshore asset move penalty overview

This guidance covers penalties under Schedule 21 FA 2015 known asoffshore asset move penalties. These penalties are different penalties from those under Schedule 41 FA 2008, but apply if there is an underlying penalty under Schedule 41. There are similar provisions in relation to Schedule 55 FA 2009 and Schedule 24 FA 2007 penalties, see CH62291 and CH82489 respectively.

If you think that a person is liable to an offshore asset move penalty under Schedule 21 FA 2015you must first discuss the case with your manager and then make a report to Central Policy, Tax Administration Advice (TAA). See CH73219 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 failure to notify under Schedule 41 Finance Act 2008 - 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 notify under Schedule 41 Finance Act 2008, the relevant time is the start of the tax year to which the obligation to notify relates.Legislation

The legislation is in Schedule 21 FA 2015.

Commencement date

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