Do you need to pay tax on your overseas interests?

The tax office is warning those with overseas investments to declare income ahead of the introduction of a new sophisticated international tax detection system.

HM Revenue & Customs (HMRC) said those with overseas assets, such as property and bank accounts abroad, have until 30 September to declare any foreign income or profits before 30 September to “avoid higher tax penalties”.

It explains that some UK citizens may not understand the requirement to declare overseas interests and risk coming under the hammer of the tax office.

The most common reasons for declaring offshore tax are in relation to foreign property, investment income and money into the UK from abroad, it said.

The notice comes ahead of the introduction of the Common Reporting Standard (CRS) on 1 October 2018. Under this new system, HMRC will greatly expand its reporting and investigatory powers to detect offshore non-compliance by sharing financial data across more than 100 countries.

Mel Stride, the Financial Secretary to the Treasury, said: “Since 2010 we have secured over £2.8bn for our vital public services by tackling offshore tax evaders, and we will continue to relentlessly crack down on those not playing by the rules.

“This new measure will place higher penalties on those who do not contact HMRC and ensure their offshore tax liabilities are correct. I urge anyone affected to get in touch with HMRC now.”

HMRC recommended that taxpayers work with a professional tax advisor should they feel unsure that their tax affairs are in order. For help and advice on this matter, please get in touch.