HMRC sets its sights on offshore trusts

HM Revenue and Customs (HMRC) is now focusing its attention on offshore trusts being used by wealthy individuals to hide income and assets overseas.

The campaign, launched in May, is the latest development in an ongoing crackdown by HMRC on tax evasion by affluent individuals.  It also coincides with the signing of agreements which will increasingly see British overseas territories and Crown dependencies share tax information with the United Kingdom.

People who do not disclose details of income and wealth held in offshore trusts to HMRC could face penalties of up to 200 per cent of any outstanding tax owed, as well as the possibility of a criminal prosecution.

While offshore trusts have often traditionally been used to protect assets (not for tax evasion), HMRC has continuously tightened the rules, making it all the more important for anyone using such arrangements to ensure they have kept pace with changes and remained compliant with UK tax laws.  If in doubt, you should seek professional advice at the earliest opportunity, rather than waiting for the taxman to come knocking.

For further information, please contact Stuart Hinnigan at the office.