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HMRC internal manual

Compliance Handbook

HM Revenue & Customs
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Penalties for Inaccuracies: Calculating the penalty: Penalty reductions for disclosure: Maximum and minimum penalties for inaccuracy involving an offshore matter: the definition of an offshore matter

The guidance in this page applies only where

  • the tax at stake is income tax, capital gains tax or inheritance tax, and
  • the inaccuracy involves an offshore matter, and
  • the person gave HMRC an inaccurate return or other document which relates to 2011-12 or a later year on or after 6 April 2011.

It does not apply to the Construction Industry Scheme (CIS).

An offshore matter results in a potential loss of revenue that is charged on or by reference to one of the following.

  • Income arising from a source in a territory outside the UK.

For example, the person may have an interest-bearing overseas bank account on which they do not declare the interest in their return.

  • Assets situated or held in a territory outside the UK.

‘Assets’ takes its meaning from TCGA92/S21(1) so it covers all forms of property. It includes

* physical assets such as land and buildings
* options, debts and incorporeal property generally, and
* currency - for these purposes currency includes sterling.

For example, the person may own or dispose of land or buildings overseas. They may not include the correct amount of income from property or gains from disposals on their return.

  • Activities carried on wholly or mainly in a territory outside the UK.

For example, the person may have a trade (or a branch of a trade) overseas but omit the profits from their return.

  • Anything having effect as if it were income, assets or activities of a kind described above.