UK to clamp down on non-disclosure jurisdictions

HMRCInvestors who move money to non-disclosure jurisdictions will be kept in check by new rules from the UK tax authorities, which plan to make it a criminal offence to evade offshore tax. According to a consultation paper, HM Revenue and Customs (HMRC) will "prioritise for criminal investigation" those who try to escape scrutiny by moving their money from a jurisdiction which supplies HMRC with information about citizens' investments to one which does not. A survey by Skandia International found that 38% of 377 advisers across the globe with clients holding offshore assets say clients are beginning to show a preference for non-disclosure jurisdictions. However, HMRC's new proposals mean anyone who decides to move money to a non-disclosure jurisdiction in this way will be targeted for criminal investigation, even if they did not "intend" to evade tax. The developments are in keeping with a broader trend towards transparency and penalising tax dodgers. HMRC has issued a subsequent consultation paper outlining proposals for stricter penalties for those evading UK tax by placing their money in non-disclosure jurisdictions. The tougher penalty is 100% greater than if money is placed in a disclosure jurisdiction. Rachael Griffin, head of technical marketing for Skandia International, says: "Investors with undisclosed overseas assets cannot afford to stick their head in the sand. HMRC are determined to tackle overseas tax evasion, regardless of whether there is any intent to avoid tax. "Moving overseas assets to non-disclosure jurisdictions just delays the inevitable, and investors need to think carefully about their actions." Skandia International is a part of the retail investment business Old Mutual Wealth, which oversees £80.3 billion (€100 billion) in customer investments. ©2014 funds europe

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