Your overseas assets, income and gains

Hidden overseas assets

This is the heading of the latest nudge letter from HMRC.  Quite a snappy title and attracts most people’s attention to get them to read on further.  But then how does HMRC know that you have any overseas assets?  Or overseas income?  Or overseas gains?

The Common Reporting Standard (CRS)

CRS has been running for a few years now and reports certain key information to HMRC from anywhere overseas.  So if you have an assets (perhaps a bank account or property) and that asset has a UK postal address connected to it, HMRC will be notified.  What is reported is down to the entity in the overseas jurisdiction.  There is a minimum amount of information that must be provided – but there is no maximum.

But is the information being provided to HMRC accurate?

Who knows!

Certainly HMRC may not know.

Or if HMRC does suspect something already, this information will only confirm their suspicions.  Hence the nudge letter to the taxpayer.

Are they writing to the right person?

Most of the time, yes.  Barring mistakes.

But HMRC does not check the data before writing the nudge letter.

It may be a simple misunderstanding on HMRC’s part.

Worried?

If the facts provided to HMRC are wrong or misleading then their suspicions are wrong (or misleading).

In my experience though,  HMRC are in the main accurate in believing that there is a tax problem.   However, the problem is not the problem HMRC believes it to be.

What’s the issue then?

There are two issues:

  1. The recipient only has 30 days to respond, in full with facts and figures and payment.
  2. Life is complicated.  When life has its challenges, HMRC directs taxpayers to the Worldwide Disclosure Facility  in order to correct their past tax affairs.   In my opinion this is not the most helpful or customer friendly medium.  And that’s when it works!
What should you do?

Seek specialist advice.  The nudge letter will give you only 30 days in which to respond.

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