Tax advice of the week: Declare your offshore accounts
Aug 21, 2009
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If you are one of the estimated 5,000 Britons with money in an overseas offshore bank account, there is good news and bad news, says The Independent on Sunday.
The bad news is that the taxman is after you, as part of a wider crackdown to recoup an estimated £500m of unpaid tax from British offshore investors over the next four years.
The good news is that HM Revenue & Customs is giving "preferential treatment" to Britons who have deposited money with Liechtenstein banks.
In short, anyone with investments in Liechtenstein has to declare unpaid tax going back ten years and faces a 10% fine on any unpaid tax. Those with offshore investments in other jurisdictions, on the other hand, face fines as high as 20% on unpaid taxes going back 20 years.
The Liechtenstein arrangement with Britain is odd for another reason, says Dan Atkinson in The Mail on Sunday. "Britain agreed to give account holders until 2015 to come clean (disclose details of amounts held in offshore accounts) as opposed to four months for those with accounts elsewhere."