The requirement to correct (RTC) regime imposes significant new penalties for failing to correct any offshore tax non-compliance for periods up to 5 April 2017 before 30 September 2018. The scope of RTC is wide and applies not only to income tax and capital gain tax, but also to inheritance tax. Historic IHT liabilities could be unexpectedly caught by RTC, for example in EBT settlements where income tax liabilities have been agreed with HMRC but IHT has not been considered as part of the settlement, or where it could be argued that there is an additional settlor(s) unbeknown to trustees. Trustees, settlors and beneficiaries need to correct historic issues in the most appropriate way, for example by using HMRC’s worldwide disclosure facility.
In this article, featured in Tax Journal on 9 February, PwC's Tax Disputes experts Natalie Martin and Jon Preshaw discuss some relevant examples where historic IHT liabilities could be unexpectedly caught by RTC, and offers some practical advice to help advisors and taxpayers identify any areas of possible risk, and correct historic issues in the most appropriate way before the regime comes into effect in October 2018.
A hard copy of the article is available here.
Please contact Natalie or Jon for further advice and support.
