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Court of Appeal’s Expat Tax Ruling

The individual concerned had initially been successful in challenging HMRC’s demand that he provide them with full disclosure of his financial assets. He had argued that as he no longer lived in the UK, he no longer fell within the jurisdiction of the HMRC.

However, HMRC demonstrated to the Court of Appeal that the man met the ‘sufficient connection’ test as he had previously resided and paid tax in the UK. This was supported by a separate Serious Fraud Office action in relation to the expat’s finances.

Conclusions

The case clearly indicates that the full and frank disclosure of cross-border assets to all relevant jurisdictions should be considered an expat financial planning priority for all cross-border individuals – a picture which is further supported by the advent of the Common Reporting Standard as well the new Crime (Overseas Production Orders) Act 2019.

As such, all but the most seasoned and hands-on of individuals should seek specialist wealth planning advice in regard to the extra-territorial effects of their international assets.

Lord Justice Patten noted in the court judgment that there was strong public interest in ensuring that HMRC is able to use the sufficient connection test to pursue the potential tax liability of expats.

Expat Financial Planning Services with Blacktower FM

Blacktower FM works to assist clients in protecting, growing and structuring their wealth in a way that makes the most of their cross-border opportunities and obligations.

For more information about how we may be able to help you achieve your financial and retirement goals, including tax planning services for expats, contact us today.

*Jimenez, R. (On the Application of) v The First Tier Tribunal (Tax Chamber) [2019] EWCA Civ 51, http://www.bailii.org/ew/cases/EWCA/Civ/2019/51.html (Accessed 17-05-19)

Other News

Expat Tax Planning in 2019

Calendar PlannerTax planning should be a New Year priority for any British citizen who has recently become an expat.

Just last year HM Revenue & Customs increased its efforts to ensure expats met their full tax obligations and has begun to successfully use EU laws that encourage co-operation between member states. “We will not hesitate to use all legal means to collect taxes that are owed,” commented an HMRC spokesperson. Despite this tough talking, the EU this year criticised the UK for its poor record of cross-border tax collection.

It is important to remember that although the HMRC’s new stricter approach remains at an early stage, it is already paying dividends for the government, which estimates that it lost £1.7bn in tax revenue in 2016-17, compared to £4bn in 2011-12. Furthermore, 1,006 requests for tax information were made to EU authorities in 2017. This resulted in the recovery of £5 million. In comparison, similar requests in 2013 yielded just £800,000.

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Offshore Is Dead; Long Live Onshore

On Monday, the Guardian, the BBC, Le Monde and 50 other media outlets reveal that HSBC’s Swiss banking arm helped wealthy customers dodge taxes and conceal millions of dollars of assets, doling out bundles of untraceable cash and advising clients on how to circumvent domestic tax authorities. The HSBC files consist of thousands of pages made available via the International Consortium of Investigative Journalists. Covering the period 2005-07, they amount to the biggest banking leak in history, shedding light on some 30,000 accounts holding almost $120bn (£78bn) of assets. Many of the accounts allegedly belonged to prominent figures in business, film, music and sport, to name a few.

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