Wealth Manager - the site for professional investment managers

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

Wealth managers risk fines over offshore asset warning letters

Wealth managers risk fines over offshore asset warning letters

Wealth managers have only days to send clients warning letters about disclosing overseas assets to the taxman, or risk a £3,000 fine.

Wealth managers, advisers and fund managers have until 31 August to send an HM Revenue & Customs (HMRC) approved letter to clients about holding assets abroad which warns them that penalties are increasing for those who do not pay the right tax on offshore assets.

Financial institutions have to send the clients letters if they are UK tax residents in either the 2015/16 or 2016/17 tax year. Failure to send the letters could lead a penalty of £3,000 for the adviser.

‘Come to us before we come for you,’ says the template letter from the tax man. 

‘You need to regularly check that you have declared all of your UK tax liabilities and, if needed, bring your tax affairs up-to-date. This is your responsibility. If you are confident that your tax affairs are up-to-date and complete, then you don’t need to do anything further.’

The letters are part of a global transparency drive by HMRC which it said is giving it ‘unprecedented information’ on people’s overseas accounts and investments in 100 jurisdictions globally.

‘If you have already declared all of your past and present income or gains to HMRC, including from overseas, you do not need to worry. But if you are in any doubt, HMRC recommends that you read the factsheet attached to help you decide now what to do next,’ the template letter says.

It also warns that penalties are increasing for those who do not declare the right offshore tax and could result in ‘potentially life-changing consequences’.

Tina Riches, a partner of Smith & Williamson, told the Financial Times: ‘We have ended up having to send them to almost everybody.’

Riches thought there would be millions of letters sent out as some people would receive them from more than one adviser.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
CIO Tapes 2: two warnings and a lot of optimism

CIO Tapes 2: two warnings and a lot of optimism

Our group of leading asset management CIOs see a lot of opportunities – and overseas investors are buying UK too

Play Wealth Manager Retreat 2017: size isn't everything

Wealth Manager Retreat 2017: size isn't everything

We asked our delegates at the Wealth Manager Retreat what they think about the recent wave of consolidation in the industry.

1 Comment Play CIO Tapes - part 3: 'passive funds are anti-capitalist'

CIO Tapes - part 3: 'passive funds are anti-capitalist'

Citywire recently gathered three of the UK's leading fund investment heads to discuss their hopes, fears and the issues that their jobs throw at them daily.

Read More
Your Business: Cover Star Club

Profile: Kleinwort Hambros' boss on how to manage five banks

Profile: Kleinwort Hambros' boss on how to manage five banks

Welding together Kleinwort and Hambros – two of Britain’s most historic banks, founded in 1786 and 1839 respectively – was always going to be a challenge.

Wealth Manager on Twitter