A United Kingdom (UK) investigations team from HM Revenue & Customs (HMRC) is set to begin a countrywide sweep to locate and fine or prosecute British citizens who own property overseas yet are not declaring it on their taxes. The firm is expected to exercise treaties between the UK and other European countries to obtain records, and anyone who owns property abroad is advised to come forward now to avoid more severe penalties. The HMRC has created a specialized team called the Offshore Coordination Unit that will be scouring public records and foreign paper trails in an effort to uncover tax cheats. For more on this continue reading the following article from Property Wire.
British people who own properties overseas which they have not yet disclosed to the UK taxman should put their affairs in order now, according to a tax specialist.
The warning from tax expert Peter Howarth follows the launch of a new investigations team by HM Revenue & Customs to track down people who own land and property abroad by data mining publicly available records.
Howarth, who advises many expats and overseas property owners, says this latest development is one of a number of trends conspiring to catch out those who have undisclosed assets.
‘At one time it would be easy to buy a home overseas and no one would be any the wiser. Nowadays there is increasing transparency as land registry records and other public information is readily available on the internet,’ he said.
‘At the same time we are seeing greater international collaboration between tax authorities. The treaties in place between the UK and most other European countries mean that HMRC can follow up lines of enquiry through its counterparts overseas,’ he explained.
‘What is even more worrying is that, under the terms of a European treaty, tax due in the UK becomes collectable in other countries in many cases. So for example, in Spain, where the tax rules can be draconian, the authorities have the right to empty your Spanish bank account without a court order and even seize your house,’ he added.
Howarth believes that, despite the show of strength from HMRC, it will take a considerable time to track down offenders. Nevertheless, the long term trends mean it will be increasingly difficult to hide overseas assets.
‘People who have property they haven’t disclosed should consider putting their affairs in order now. If people do come forward, HMRC is likely to accept their disclosure without further investigation. It’s better to resolve the position now and retain some degree of control than wait to be found out further down the line and face a much tougher penalty,’ he said.
It is part of a wider crackdown by HMRC to find overseas tax cheats. It has set up a new specialist unit, the Offshore Co-Ordination Unit (OCU), which brings together a team of highly skilled offshore analysts, technical tax experts and experienced investigators, who will oversee and co-ordinate HMRC’s compliance work to identify and pursue those who hide income and assets offshore.
‘The unit will look to fully exploit the increasing amount of offshore information at HMRC’s disposal, including bank account data. They will then use this intelligence to develop innovative new ways of tackling offshore tax evasion,’ said a spokesman.
‘The days when untaxed income or assets could be safely salted away offshore, beyond the reaches of the taxman, are long gone. The launch of this specialist unit, together with the other valuable work the department is driving forward in an effort to tackle offshore evasion, underlines the fact that offshore tax cheats are fast running out of places to hide,’ he added.
This article was republished with permission from Property Wire.