HM Revenue & Customs (“HMRC”) investigations are expected within 3-6 months of first data exchange in September 2016, as a result of Automatic Exchange of Information (“AEOI”).
Individuals with assets in multiple jurisdictions need to know their obligations in each, as the reporting obligations vary from jurisdiction to jurisdiction and care will be needed to ensure the correct information is disclosed.
The People with Significant Control (“PSC”) Register was launched on the 30 June, which means that details of individuals and trustees who are PSCs are now public record. Other publicly accessible registers are being launched in other jurisdictions, such as the French Register of Trusts.
The argument for greater transparency is not just about targeting tax evasion, but also international crime and terrorism.
Global transparency is leading to the erosion of confidentiality and there is no going back from this. We are in a new and somewhat uncertain era. Individuals need to be aware of what information may be publically available. It is possible to apply for protection to prevent information on the PSC from being accessed, but this is likely to be only for exceptional circumstances.
HMRC will focus their efforts on those who are not complying with the law, but information obtained by HMRC will inevitably lead to them asking questions about a client’s tax affairs, even when there is no tax at stake.
We have seen several instances of this, with HMRC sometimes taking an aggressive and intrusive stance. It is crucial to be prepared and to be able to demonstrate compliance, as well as maintaining good record keeping backing it up.
The key message is that wealthy individuals with offshore assets will need to take great care to ensure they are compliant and can stand up to scrutiny. Their affairs are more likely to be complex, and it is important that advisers in other jurisdictions are aware of the technicalities around our legislation, and that their situation is regularly reviewed.
For more information please contact director Suzanne Briggs at firstname.lastname@example.org
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