HMRC doubles tax information requests from overseas territories

HMRC doubles tax information requests from overseas territories – are you ready for increased scrutiny?

In the last 5 years, HMRC requests for information from overseas tax authorities have doubled according to recently released information. These information requests have been made under various double tax and information exchange agreements. HMRC will also receive information under the OECD Common Reporting Standard later this year.

With HMRC receiving an abundance of information relating to offshore structures, it is perhaps inevitable that HMRC enquires into offshore trust and company structures will increase in the future. Are you confident your existing trust or company administrator is well placed to deal with increased scrutiny from HMRC? Have all UK tax risks been properly identified and, where necessary, the requisite reporting been undertaken? If not, there could be challenging times ahead!

Ensuring all UK tax risks have been identified and addressed is not easy!

Navigating the UK tax rules in relation to offshore structures presents a real challenge to trustees and directors of such structures. Even if tax advice was obtained when the structure was originally established, given the volume of UK tax changes in recent years, it is highly likely any tax advice will now be out of date. Of course, up to date tax advice can be obtained; however, if the rules being discussed are both complex and wide reaching, how will offshore directors and trustees ensure that the advice is implemented correctly? What if changes are made to the structure after the advice is issued? What if the tax status of key persons, for example trust beneficiaries, change in the future? Will the possible implications, both for the beneficiary and perhaps for the trustee, be identified?

How can Abacus help?

At Abacus we have a dedicated tax team experienced in dealing with UK and cross-border tax planning. Our in-house tax team works alongside a client’s tax advisor to ensure that any tax advice is understood by the people administering the structure and that the tax advice is implemented as planned. Where no advisor is currently in place, our tax specialists can review your structure to identify potential tax issues and ensure the appropriate advice is obtained.

In this time of increased information sharing by global tax authorities, it is crucial to ensure tax risks have been identified and where necessary properly disclosed. Utilising the services of Abacus and their in-house tax team could help address these potential issues and prevent expensive surprises in the future should HMRC start asking questions.


Written by Kevin Loundes, Associate Director