retention tax in jersey

gpduffy

i received a letter from santander jersey today .. 3 pages long that states from 2015 they wont offer the retention tax facility .. fine.

however it also draws attention to a disclosure facility from 1999 .. I've been paying retention tax .. does this mean that inland revenue can find out out my tax affairs from 1999 or is that only if ive opted to pay no taxes. any advice welcome ..

Reaper

If you have been hiding money from the tax man don't expect any sympathy here.

The disclosure rules and April 1999 date relate to an offer to allow those that have been hiding assets to come clean which you can read about here:
http://www.hmrc.gov.uk/offshoredisclosure/jersey.htm

In June 2013 Cameron persuaded Jersey and others to exchange more tax info with the UK. If you have been hiding anything I suggest you take up the disclosure offer.

bowlhead99

Reaper wrote: »

In June 2013 Cameron persuaded Jersey and others to exchange more tax info with the UK. If you have been hiding anything I suggest you take up the disclosure offer.

Effectively Jersey, Guernsey et al are going to be reporting to the UK information on UK residents' accounts, such as year end account balances and gross interest amounts credited to accounts in a year (including dividends/proceeds if they're reporting custody accounts rather than bank accounts).

The regulations have not yet been converted into local law and guidance but this is in progress in Jersey and detailed guidance for institutions should be out next month - probably jointly with the detailed guidance on what they do for US accountholders, as it was USA that kicked off this recent flurry of tax information exchange activity by demanding it from all non-US financial institutions around the world.

The banks and other financial institutions will be reporting the detailed information to the local tax authority for them to pass the information over to HMRC, prospectively rather than retrospectively (other than the delay to report it once the regime kicks in) - ie reporting 2014 information in 2015 but not going back and reporting all the facts and figures from 2012 (or indeed 10 years earlier) as a job lot just in case it's useful for HMRC.

However, presumably their reporting the existence of substantial balances in 2015/16 than have not been reported by the UK taxpayer, may prompt HMRC to say "hmm, I wonder if these accounts existed in previous years too?" And then start investigating individual cases and levying the tax bills together with nice big fines for any previous years it finds.

HMRC's offer to the public is: you know this is coming, you know if we see from these returns that we start receiving that you have some undeclared income we are going to start asking awkward questions. We would like you to get your house in order ahead of this and if you come clean and give us the details of your assets and unpaid tax payable for all tax years since 1999, and pay the tax on it, and you do this before our special 'disclosure facility' terminates in 2016, we will cap the penalties. It is effectively an amnesty (although there will still be some late payment penalties but better than what they could have been).

All financial services businesses in the Crown Dependencies are required to write to their accountholders by the end of this year, and notify them of the scheme. So, that's why you got a letter from Santander, the Jersey government made them write it to people that Santander think may be UK residents.

If in all of the tax years since 1999 you have been paying all the tax required, then presumably HMRC has no grounds to tax you further on any of those years and so there is nothing for you to disclose and pay, and no benefit from disclosing anything about your activity. The only benefit is for people who have not been paying along the way and want to avoid being in a sticky situation if/when they get found out.

IronWolf

I suggest you talk to a qualified accountant, these offshore tax issues are quite complex. If you have been evading tax come clean to HMRC while you can.