CH114210 | Offshore matters: failure to notify penalties: definition of an offshore transfer

From HM Revenue & Customs · Compliance Handbook

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.

A failure to notify involves an offshore transfer if

it does not involve an offshore matter
it is deliberate (whether concealed or not) and results in potential lost revenue
the tax at stake is income tax or capital gains tax, and
the applicable condition of Para 6AA is satisfied.

For income tax, the applicable condition is satisfied if the income to which tax is charged, or any part of the income

is received in a territory outside the UK, or
is transferred before the calculation date to a territory outside the UK.

For capital gains tax, the applicable condition is satisfied if the proceeds or any part of the proceeds of the disposal to which tax is charged

are received in a territory outside the UK, or
are transferred before the calculation date to a territory outside the UK.

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

For commencement dates for higher penalties relating to offshore transfers, see CH111200.