Are you declaring Offshore Funds correctly?

Offshore funds can be a complicated matter when it comes to declaring the correct income or capital gain on investments. It is often an area in which mistakes can accidentally occur and leave a taxpayer with an outstanding tax liability.

We have recently been notified of the intention for HMRC’s Wealthy and Mid-Sized Business Unit to send out a letter to taxpayers who fall under their supervision. The letter, with an additional briefing, will underline issues relating to the UK tax treatment of offshore investment funds.

Taxpayers will be made aware of the requirement to declare gains made on such funds correctly. This mailing exercise will be aimed at individuals who HMRC consider to be the most likely to be at risk of falling foul of tax legislation relevant to offshore funds.

It is expected that the scope of recipients will also include settlors and/or beneficiaries of offshore trusts. The tax issues raised are predominantly relevant to parties who have invested in offshore funds and are taxed on the arising basis in the UK.

The taxation of offshore funds is highly complex and is clearly on HMRC’s radar. Individuals who do receive these letters should review their affairs carefully to ensure that income and gains from offshore funds have been correctly reported. The letter does not require any action to be taken if it is concluded that such income and gains have been correctly reported.

If you require any help with your 2018/19 tax return, or if you have any queries relating to HMRC’s intentions, please do not hesitate to contact us on 01704 891676 or via email at