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Did you really think FATCA was a joke?

March 14, 2019

The UK government has recently set out plans to make failure to declare offshore assets and tax arrangements a criminal offence – does this feel a bit like a Modelo 720 approach?

In a consultation paper issued in August the UK Government proposed to make it a “strict liability offence” to conceal funds offshore for illegitimate tax purposes. Under these new proposals this will become a criminal offence and furthermore the UK intends to toughen the existing penalties for tax evasion.

The UK already has thirty three sharing deals in place with different jurisdictions based on a common reporting standard. You will not be surprised to know that the Channel Islands, Isle of Man, UK overseas territories, Gibraltar as well as Spain and Portugal are on the list. However in order to capture those outside of these arrangements HMRC says it will prioritise for criminal investigation anyone that moves money to a jurisdiction that is not part of the common reporting standard.

Apparently over 56,000 people have already told HMRC about offshore assets and the hunt is on for more. In some jurisdictions such as Isle of Man HMRC has “invited” those to voluntarily disclose their arrangements within a limited period of time.

The message is very clear and one that our certified financial planners have been saying for a good while; that there is no longer any hiding place for undisclosed financial assets wherever these are held and under whatever guise they are held, be that in the name of an individual, trust or offshore company.

We have been preaching for a long time the necessity to clean up any opaque arrangements in favour of transparent and well thought out legitimate tax planning strategies, however we are constantly bemused by the large number of people who believe that these new initiatives are aimed at the very wealthy and that legislation will pass them by. Unfortunately the large amount of information made available and exchanged between authorities means that even those of modest wealth can easily be caught out in the drive for total compliance with these new rules. Even more surprising we still find a few prospective clients asking our financial advisers about the possibility of creating trust arrangements for the sole purpose of hiding assets from the authorities.

Why risk the intrusion into your personal finances when with proper financial planning you can safely hold your investments without running the risk of an investigation by the authorities?

Why take a chance by not disclosing on Modelo 720? The penalties are severe and the chance of the Spanish authorities being able to trace your offshore funds wherever they are held and under whatever structure is getting easier and easier. With the introduction of FATCA is it pretty much game, set and match for Hacienda, HMRC and any other tax authority.

Let us help you moving forward with your pensions and investments. We urge you to take financial advice now and contact a financial planner on 900 102 374 or by email