Anyone owing UK tax on an overseas income could face a fine of at least 30% of the tax due, according to new draft legislation in Britain.
In addition, criminal prosecution could be pursued.
HMRC can have a look back of 20 years into the person’s tax affairs, meaning that penalties could mount for any previous failures to report.
The draft legislation was announced in November. Its impact would be to make it a criminal offence to not declare offshore income and gains.
By removing the need to prove deliberate intent for serious cases of failing to make accurate declarations, such failure would become an offence instead.
There are fears that people who make a mistake in their tax affairs could be caught up in criminal proceedings, such as anyone who does not think that funds are taxable in the UK because they have already been taxed in the country of residence.
HMRC already enjoys serious powers to investigate anyone with either UK or offshore untaxed funds where it can show these were deliberately undeclared. Even if HMRC can not prove criminal intent, there are civil penalties can be levied of up to double the amount of tax owed.
The new legislation will create a new criminal offence.
Anyone with concerns should seek advice from qualified experts.
The sharing of bank information internationally comes into effect from January 2017 but data from January 2016 will be included.
For advice on local lettings legislation and other matters concerning Portuguese and international taxation, contact NALLE
