CH111100 | Offshore matters: introduction: overview

This guidance deals with penalties that involve an offshore matter or an offshore transfer. The date from which these penalties will apply is determined by the type of penalty and tax regime involved.

Offshore matters

An offshore matter is an inaccuracy, failure to notify, failure to file on time or deliberate withholding of information that relates to

• income arising from a source in a territory outside the United Kingdom (UK)

• assets situated or held in a territory outside the UK

• activities carried on wholly or mainly in a territory outside the UK,

and the inaccuracy or failure relates to offshore income or gains.

Offshore transfers

Schedule 20 to the Finance Act 2015 rendered certain failures previously falling outside of the offshore penalty regime subject to the regime if they met the requirements for involving an “offshore transfer”. The offshore transfer provisions were introduced to ensure that diverting income, disposal proceeds or assets offshore can be subject to higher offshore penalties.

An offshore transfer takes place when there is a deliberate:

• inaccuracy

• failure to notify

• withholding of information (failure to file on time penalties)

that does not involve an offshore matter, and:

• taxable income, or any part of the income, is received in a territory outside the UK, or

• taxable income, or any part of the income, is transferred to a territory outside of the UK before the statutory filing date

• disposal proceeds, or any part of the proceeds, giving rise to a charge to Capital Gains Tax are received in a territory outside the UK, or

• disposal proceeds, or any part of the proceeds, giving rise to a charge to Capital Gains Tax are transferred to a territory outside of the UK before the statutory filing date

• assets that give rise to a charge to Inheritance Tax are transferred outside of the UK after the event giving rise to the tax charge but before the statutory filing date

The penalties and the penalty rates involving offshore transfers are the same as the penalties for offshore matters.

For specific guidance on

• Failure to file on time penalties, see CH112000.

• Failure to notify penalties, see CH114000.

• Inaccuracies penalties, see CH116000.

A further penalty may be incurred if a person moves an asset that is connected with an underlying penalty they are already liable to. For more information about asset move penalties, see CH119000.

For guidance on how these penalties interact with the Human Rights Act (HRA), see CH300000.