By September 30th 2018, landlords needed to declare any income earned from properties abroad. Mid-summer this year HMRC warned any such earnings from abroad, be it from renting or business, should be declared by the named date. Will you or your business be affected? And what else changed recently?
Under the Common Reporting Standard (CRS), applicable since October 1st in over 100 countries, now the HMRC can receive information about off-shores assets easier. But whom will these regulations and changes affect?
Am I affected? What to do if unsure
We can list a few instances which make you liable to these regulations:
- you own property abroad which you rent (even if it is a holiday home which you live in yourself for part of the year);
- you live abroad and you rent out your property in the UK;
- you own commercial space or buildings abroad;
- you receive inheritance from abroad relatives;
- you run a business abroad;
- you own shares into a business abroad.
Maybe not that obvious at a first glance, but also the following fall under the same new law, as detailed by HMRC on their website:
- you opened saving accounts abroad;
- you own jewellery which is kept abroad;
- you own a boat which is kept abroad;
- you hold intellectual property over images used abroad.
Just naming a few instances, this list aims to help you get a better idea if you might be affected. In case you are still unsure, best advice we can give is to contact your accountant and/or the HMRC. If you do not work with a professional accountant or tax advisor, you might consider getting advice. HMRC currently applies penalties to any undeclared income from abroad.
History behind the new Requirement to Correct law
Before the new Requirement to Correct legislation,the government initiated the Let Property Campaign. Aimed at informing and helping people declare their abroad assets, the campaign offered an e-learning course, webinars and also online documentation.
But we can trace this whole initiative back to 2010. Quoted by the HMRC website, the Financial Secretary to the Treasury, Mel Stride MP, recently 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.”
Also, mainstream media published a series of reports and features around the matter. Last year, The Guardian mentioned how Newham council discovered that 13k landlords in only their borough failed to declare income from offshore properties.
I declared my abroad assets – what happens next?
If you work with a professional accountant, tax or business advisor, you most probably already declared any taxable earnings from abroad. HMRC set September 30th, 2018 as the deadline for any business, professional or landlord to inform them on offshore assets.
Now you have 90 days to fill in the details on such earnings and pay any tax due. Here, your accountant or tax specialist advisor could help, especially if this is entirely new to you.