Revenue warns taxpayers of offshore asset clampdown
Almost 500,000 to get letters urging them to declare assets held abroad before deadline
Under recently enhanced co-operation designed to clamp down on international tax evasion, the Revenue is getting access to records held on Irish-based taxpayers by tax authorities in other countries.
And while the primary focus was to catch and/or deter large-scale tax evaders, the new rules could impact anyone with a bank account in another jurisdiction or an inherited property that is being rented out for part of the year.
“Offshore does not just mean assets or funds held in exotic locations and includes any income or assets held outside Ireland, for example a UK pension or rental income from a holiday home overseas,” said Mark Barrett, president of the Irish Tax Institute.
He urged people who suspect they might fall into this category to contact their financial adviser.
The new rules coming into force on May 1st mean people with undisclosed offshore assets will feel the full force of the Revenue after that date.
They will no longer be able to file a “qualifying disclosure” – a voluntary disclosure of a tax liability or omission in a previous filing – in relation to property, funds or accounts held abroad after April 30th under new rules introduced in the Finance Act. Such a disclosure generally qualifies where someone contacts Revenue with details of the tax owed before Revenue pursues them.
A qualifying disclosure allows errant taxpayers to avail of lower penalties on back tax owed as well as avoiding publication of their details in the quarterly tax defaulters’ list and possible criminal prosecution.
However, the 2016 Finance Act withdraws that option for people who have failed to disclose offshore assets. Revenue argues that “concealment of foreign income and assets” is “deliberate behaviour” – the most serious category of tax default – as “it is difficult to see how a taxpayer might lodge undeclared money in a foreign account purely through carelessness, rather than with the intent to evade tax”.
The letters urging taxpayers to review their tax affairs, are being sent to everyone who filed under self-assessment for 2015 – more than 480,000 people.