In a world of increasingly complex tax legislation, it can be easy to make a mistake or misunderstand your tax obligations. The drive towards global tax transparency means that it is important to ensure that your tax affairs have been dealt with correctly.
HM Revenue & Customs (HMRC) have made a number of disclosure facilities available to assist taxpayers in bringing their tax affairs up to date. Depending on your circumstances, these facilities can be helpful in limiting the number of tax years HMRC can assess you to tax, as well as potentially reducing the penalties payable.
The Isle of Man Disclosure Facility (IOMDF)
The IOMDF is available to UK resident individuals and companies who have held relevant property in the Isle of Man at some point between 1 April 1999 and 31 December 2013. If you are eligible to participate, you may be able to benefit from the limited assessment period (going back to accounting periods/tax years commencing on or after 1 April 1999) and reduced penalties.
It is important to realise that automatic exchange of information between the Isle of Man and the UK will soon be a reality. If you do have any undeclared UK tax liabilities and have held assets in the Isle of Man, the IOMDF offers the opportunity to regularise your UK tax affairs.
The Liechtenstein Disclosure Facility (LDF)
The LDF is available to a wider range of entities when compared to the IOMDF, including trusts. Like the IOMDF, making a disclosure under the LDF can result in reduced assessing time limits and penalties with the added benefit of immunity from criminal prosecution. The LDF can be particularly beneficial if there is a UK inheritance tax irregularity. In order to participate in the LDF, you must obtain a Confirmation of Relevance from a Liechtenstein Financial Intermediary, which we can assist you with.
Of course, in some cases, a simple voluntary disclosure may be the most appropriate course of action.
At Hotchkiss Associates Limited, we have experience in making disclosures under the various disclosure facilities as well as making voluntary disclosures and amendments to tax returns, both in the UK and the Isle of Man. We can review your tax affairs to help you determine if you have any outstanding tax obligations and if so, how best to address them.
Please contact us for a confidential discussion.