- Home » Expat News » Brit expats at risk of undeclared cash tax penalties
Brit expats at risk of undeclared cash tax penalties
| Published: | 2 Jun at 6 PM |
Want to get involved?
Become a Featured Expat and take our interview.
Become a Local Expert and contribute articles.
Get in touch today!
Become a Local Expert and contribute articles.
Get in touch today!
As a result of a new global transparency drive, financial data related to British citizens living overseas is to be sent to HM Revenue and Customs by world financial centres.
HMRC is preparing to receive the data this week as part of a coordinated global attempt to crack down on tax evaders, but innocent British nationals living abroad with no intention of avoiding tax may well be caught up as a result. Many thousands of expats holding undeclared savings accounts may find themselves being issued with penalty notices once their details are transferred to their present country of residence in September.
British expats may have erroneously believed they had no need to declare any income to the tax authorities in their countries of residence, not realising it’s the norm in the majority of countries to tax residents on their worldwide income, gains and occasionally their actual wealth. For example, those holding ISAs may not have realised their tax exemption in the UK does not apply if they’re living overseas. According to experts, holders of these popular individual savings accounts believe they are tax efficient outside the UK.
Tax experts are advising those who have undisclosed assets to voluntarily declare them in order to get reduced penalties. However, a number of popular expat destinations impose heavy fines, with Spain’s horrendous penalties in particular often totalling a sum far exceeding the value of the actual assets. One unlucky pensioner living in Granada took his case to the European Court of Justice when his fine of 442,000 euros for late disclosures far exceeded his actual wealth in cash and stocks. The European Commission has told the Spanish tax authority its fines are disproportionate to the offence.
Insurance companies, building societies, investment companies and banks are now forced to send data about overseas clients’ accounts including balances by the end of this week. Similar deadlines apply to those countries now working under the data-sharing Common Reporting Standard, with the first exchange of information dealing with accounts holding more than one million euros taking place by September this year.
Source: Financial Times
HMRC is preparing to receive the data this week as part of a coordinated global attempt to crack down on tax evaders, but innocent British nationals living abroad with no intention of avoiding tax may well be caught up as a result. Many thousands of expats holding undeclared savings accounts may find themselves being issued with penalty notices once their details are transferred to their present country of residence in September.
British expats may have erroneously believed they had no need to declare any income to the tax authorities in their countries of residence, not realising it’s the norm in the majority of countries to tax residents on their worldwide income, gains and occasionally their actual wealth. For example, those holding ISAs may not have realised their tax exemption in the UK does not apply if they’re living overseas. According to experts, holders of these popular individual savings accounts believe they are tax efficient outside the UK.
Tax experts are advising those who have undisclosed assets to voluntarily declare them in order to get reduced penalties. However, a number of popular expat destinations impose heavy fines, with Spain’s horrendous penalties in particular often totalling a sum far exceeding the value of the actual assets. One unlucky pensioner living in Granada took his case to the European Court of Justice when his fine of 442,000 euros for late disclosures far exceeded his actual wealth in cash and stocks. The European Commission has told the Spanish tax authority its fines are disproportionate to the offence.
Insurance companies, building societies, investment companies and banks are now forced to send data about overseas clients’ accounts including balances by the end of this week. Similar deadlines apply to those countries now working under the data-sharing Common Reporting Standard, with the first exchange of information dealing with accounts holding more than one million euros taking place by September this year.
Source: Financial Times
Comments » No published comments just yet for this article...
Feel free to have your say on this item. Go on... be the first!
