CH122020 | Offshore matters: asset-based penalties: circumstances when an asset-based penalty is chargeable

The asset-based penalty will apply where all of the following conditions are met:

• The person makes an inaccuracy in their tax return, fails to notify a charge to tax, or fails to make a return on time.

• The inaccuracy or failure relates to an offshore matter or offshore transfer.

• The behaviour that led to the failure or inaccuracy is deliberate (whether concealed or not).

• The person has been charged a penalty in respect of that inaccuracy or failure under:

• Schedule 24 FA 2007.

• Schedule 41 FA 2008.

• Schedule 55 FA 2009.

• The income, gain or transfer of value that relates to the inaccuracy or failure has a clear link to the underlying asset.

• The tax at stake is (or includes) capital gains tax, inheritance tax or asset-based income tax, see CH122110.

• The potential lost revenue in relation to the offshore matter exceeds £25,000.

The asset-based penalty may also apply to earlier years (2015-16 and earlier) when a person fails to correct their offshore tax non-compliance on or before 30 September 2018 (or as otherwise agreed with HMRC) and the following conditions are met:

• The person fails to correct relevant offshore tax non-compliance, see CH123050 onwards.

• The person has been charged a penalty in respect of that failure under Schedule 18 FA (No 2) 2017 paragraph 1 – Failure to correct relevant offshore tax non-compliance.

• The person was aware at any time during the requirement to correct period (6 April 2017 to 30 September 2018) that at the end of the 2016-17 tax year they had relevant offshore tax non-compliance to correct.

• The income, gain or transfer of value that relates to the non-compliance has a clear link to the underlying asset.

• The potential lost revenue in relation to the offshore matter or transfer exceeds £25,000 in a tax year.