Requirement to Correct Tax due on Offshore Assets (RTC)

Undeclared assets from overseas must be declared to HMRC by 30 September 2018.

 Will this RTC legislation effect British tax payers holding assets in Bangladesh? 

The HMRC requires all UK taxpayers to declare previously undisclosed income or profits on their offshore assets by the 30 September 2018, to avoid tax penalties under the new Requirement to Correct (RTC) legislation.

This includes income or profit from assets such as from letting a property abroad, transferring income and assets from one country to another, or renting a UK property while living abroad.

The worldwide disclosure facilities team at the HMRC today (7/11/ 2018) has clarified specific points which may or may not effect British/Bangladeshi tax payers holding assets in Bangladesh;

1) That Individuals have assets in Bangladesh which may be in joint names with other family members who are not British tax payers.

2) Also that there assets owned which may be an inheritance but these are ancestral lands or properties which does not bring any income, even if it is rented out. The rental income is used to pay government fees and maintenance. Therefore, there is no actual income or profit.

Are these required to be declared under the new Legislations?

The HMRC has stated that the worldwide disclosures are only required on assets to which there is an income or profit, such as from rental income or income from sale of properties or other assets as stated above.

The HMRC also advised that any interests from monies/savings in offshore banks also have to be disclosed.

If there is no income or profit from any property or properties or other assets or income from savings, then there is nothing to declare.

HMRC RTC guidance explains what the RTC is and provides information for those who are required to disclose information to HMRC through the online system.

After notifying the HMRC of the intention to declare, taxpayers have 90 days to make full disclosure and pay any tax that is owed.

The RTC is a legal requirement introduced by F(No 2) A 2017 which created an obligation to all who have undeclared UK Tax liabilities that involves offshore assets.

It covers income tax, capital gains tax and inheritance tax that HMRC could lawfully assess as at 6 April 2017.

New penalties will apply from 1 October 2018 to those who failed to correct this by the deadline unless reasonable excuse can be shown.