The deadline for compliance coincides with the date on which HMRC will, under the Common Reporting Standard, begin accessing information from 100 countries, on assets and accounts held in the name of UK resident taxpayers, which forms part of global initiative to reduce tax evasion.
RTC application and time limits – what you need to know
RTC applies to companies, individuals and trustees who have offshore assets or made cross-border money transfers and covers all of the following:
- Capital gains tax, income tax and inheritance tax
- Assets held in a jurisdiction outside of the UK
- Income from a jurisdiction outside of the UK
- Income derived from activities that mainly occur in a jurisdiction outside of the UK
- UK income transferred abroad before 6 April 2017
- In cases of inheritance tax, the transfer of an asset outside of the UK
- Any activity or asset that occurs to the effect of the first four above-listed points
Time limits for assessment depend on the level of good faith HMRC believe has been demonstrated by the taxpayer:
For example, HMRC will only investigate errors made in good faith if they occurred as recently as tax year 2013/14 or later; errors made carelessly from tax year 2011/12 and later; and, in the case of “deliberate error”, from tax year 1997/98 and later.
It is important to remember that HMRC may not always agree with the you as to whether an error was innocent, careless or reckless and it may seek to investigate regardless. However, there is an important defence available: reasonable excuse.
Reasonable excuse
Taxpayers may avoid penalty if they can demonstrate they have “reasonable excuse”.
Examples of reasonable excuse may include incorrect, fraudulent, “bad faith” or negligent advice from a suitable and qualified financial adviser. For example, if you have been advised by a professional adviser to take part in a “legal” financial management scheme in the Cayman Islands that you later learn falls foul of RTC legislation.
Contact Blacktower today
Blacktower Financial Management can help you to optimise your finances, including expat regular savings and other investments, while also ensuring that they are compliant with RTC.
Contact us today for more information.
This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.
The process of sharing information across the planet has never been easier or simpler, thanks to constant upgrades and improvements being made in the field of information technology. These advancements have led to the implementation of the Foreign Account Tax Compliance Act (FATCA) in the US, and the Common Reporting Standards (CRS) over on this side of the pond.
The UK government has admitted there are not enough pension transfer specialist advisers to deal with demand, particularly in the case of more complex transfers into overseas pensions. This was the government’s response in March to a consultation launched two years ago, on whether the need to take financial advice, introduced with pension freedoms, created difficulties for overseas residents – residents such as those living in Cyprus wishing to transfer their pension savings from the UK to a qualifying recognised overseas pension scheme (QROPS).