SolvedCH53530 | Assessing Time Limits: Extended time limits: 12 year time limit for offshore matters and offshore transfers: Definition of an offshore transfer
From HM Revenue & Customs · Compliance Handbook
The 12 year time limit only applies for income tax, capital gains tax, and inheritance tax involving offshore matters or offshore transfers.
The extended 12 year time limit can only apply to offshore transfers, where HMRC can show that the lost tax was significantly harder to identify because of the transfer. See CH53540.
Income tax and capital gains tax
Lost income tax or capital gains tax involves an offshore transfer if
it does not involve an offshore matter, and
the income, or the proceeds of the disposal, (including assets derived from or representing the income or proceeds), or any part of the income or proceeds, is transferred to a territory outside the UK before the relevant date.
The ‘relevant date’ is
the date when the taxpayer, or person acting on their behalf, delivered the tax return to HMRC, or
31 January following the end of the year to which the loss relates, if a return has not been delivered.
Inheritance tax
Lost tax involves an offshore transfer if
it does not involve an offshore matter, and
the property is transferred to a territory outside the UK at a relevant time.
The ‘relevant time’ is a time after the chargeable transfer, but before
the date when the account required by section 216 IHTA 1984 was delivered to HMRC
any later date when a person delivered a further account to HMRC to remedy a material error or omission in the original account.
There is further guidance on offshore transfers in CH112210.
Please note that when considering the 12 year offshore time limit, what is considered as an ‘offshore matter’ and ‘offshore transfer’ differs from other legislation in the Taxes Acts. For example, ‘income or assets received in a territory outside the UK’ is considered to be an offshore matter for the extended time limits but is an offshore transfer for penalties under FA07/Sch24/Para4A.