Individuals who are resident in the UK are taxable in the UK on their worldwide income and gains, not just those arising in the UK. The Requirement to Correct (‘RTC’) is a legal obligation for taxpayers with overseas assets to correct any historic issues with their UK tax position by 30 September 2018.
Where errors remain uncorrected after this deadline, taxpayers then face the ‘Failure Correct’ penalty regime. This includes:
- Penalties ranging from a minimum of 100% to as much as 300% of the tax underpaid.
- A further penalty of up to 10% of the relevant asset value where the unpaid tax is over £25,000 for any tax year.
- Potential ‘naming and shaming’ where over £25,000 of tax is at stake.
Some typical examples of things which need to be declared include interest on overseas bank accounts, dividends from foreign companies, foreign pensions, and income and gains from foreign property. In addition, UK tax liabilities can potentially arise where UK residents have invested in unlisted foreign companies, even where no dividends have been paid.
What should you do and how can SGD help?
If you are confident that your tax affairs are in order, you do not need to do anything. If, however, you are concerned that you may have received income or gains overseas which you have not reported to HMRC, please contact us. We are can assist you in reviewing your historic position and, where necessary, making disclosures to HMRC.