The next wave of information has been released by the Panama Data Leak. A searchable database published of nearly 320,000 entities created in 21 jurisdictions covering nearly 40 years up to 2015.
At the anti-corruption summit hosted by David Cameron, commitments were made by governments around the world to implement new measures to tackle tax evasion and broader corruption in a further push towards global tax transparency. Among other key areas, it was set out that the UK will establish a public register of company beneficial ownership information for foreign companies who already own or buy property in the UK.
A number of countries have agreed to create public registers of beneficial ownership of companies. Additionally, under a separate initiative several countries have agreed to automatically exchange details of the beneficial ownership of trusts and companies in their jurisdiction.
Over 100 countries are committed to the Common Reporting Standard (CRS) for automatic exchange of information from either 2017 or 2018. UK residents with bank accounts and interests in entities such as trusts and overseas companies will have their identity and financial information reported to HMRC from these jurisdictions.
We anticipate HMRC will systematically risk review and closely analyse all data available to them and in turn seek to commence civil, or criminal, investigations if they believe tax has been evaded or there is any other tax non-compliance.
Given the volume of data, we would not rule out a more general approach with HMRC asking groups of taxpayers to reconfirm their compliance or, if they cannot, to make a voluntary disclosure. HMRC’s new worldwide disclosure facility is due to go live in 2016 and run through to 2018.
Regardless of how data or information regarding an individual’s assets finds its way to HMRC, most individuals with offshore assets will be in one of the following three categories and the action they need to take will differ.
1) Assets and/or underlying income have been fully and correctly declared on tax returns submitted to HMRC — no further action.
2) Assets and/or underlying income have not been disclosed on tax returns on the basis there is no requirement to do so. The key question is has current tax advice been taken to confirm this is the correct filing position and if so has the advice taken been properly implemented.
3) Assets and/or underlying income have not previously been disclosed to HMRC but should have been — a disclosure should be made to HMRC as soon as possible to ensure that an individual’s affairs are brought up to date and penalties are kept to a minimum. Advice should be taken on how best to make a disclosure to HMRC.
For further information on making a disclosure or if your affairs are under enquiry by the tax authorities visit our personal tax investigations page.