Moving overseas assets to non-disclosure jurisdictions risks criminal investigations


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19/08

Moving overseas assets to non-disclosure jurisdictions risks criminal investigations

The new consultation paper issued today by HMRC, which plans to make it a criminal offence to evade offshore tax, will directly impact those investors looking to move money to non-disclosure jurisdictions. HMRC will ‘prioritise for criminal investigation’ those who move out of a jurisdiction with a disclosure agreement in place* in an attempt to escape scrutiny.

Research** by Skandia International, part of Old Mutual Wealth, has found that 38% of advisers with clients holding offshore assets say their clients are starting to prefer other non-disclosure jurisdictions for investing their money. The new proposals announced today mean that anyone taking such action, and moving money to a non-disclosure jurisdiction, will be prioritised for criminal investigation by HMRC.

HMRC have also issued a subsequent consultation paper today outlining proposals to impose tougher penalties for those evading UK tax by placing their money in a non-disclosure jurisdiction. The tougher penalty is 100% greater than if money is placed in a disclosure jurisdiction.

Investors need to think carefully about what actions they take. Moving money to a non-disclosure country could be very short sighted and will, if the proposals are introduced, have serious criminal implications, even if they did not ‘intend’ to avoid paying any tax.

Disclosing overseas assets doesn’t have to be painful. With advice from a professional, the assets can be restructured to make them efficient from a tax and reporting perspective. For example, placing the investment into an offshore bond means the investment can grow free from tax (other than withholding taxes on the underlying funds) making it a more efficient investment going forward.

The consultation period is due to close 31 October 2014.

Rachael Griffin, head of technical marketing, comments:

“Investors with undisclosed overseas assets cannot afford to stick their head in the sand. HMRC are determined to tackle overseas tax evasion, regardless of whether there is any intent to avoid tax. Moving overseas assets to non-disclosure jurisdictions just delays the inevitable, and investors need to think carefully about their actions. Taking the bull by the horns and disclosing assets doesn’t have to be that painful. With professional advice, investors can still make their assets efficient from a tax and reporting perspective.”

*Refers to the new Common Reporting Standard (CRS) agreement, which is an automatic exchange of information the UK has with 42 other countries, due to be implemented shortly. The CRS will supply HMRC with extensive information on the offshore investments of UK residents.

**Skandia International Q2 2014 adviser survey, completed by 377 financial advisers from across the globe.

For more information contact

Sophie LentonOld Mutual Wealth02380 916 77007834 499 558
Amelie ShepherdOld Mutual Wealth02380 916 09107834 499 596

Notes to Editors:

Old Mutual Wealth

Old Mutual Wealth is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

It has an adviser and customer offering spanning:

  • Financial advice delivered by the Intrinsic network in the UK and AAM Advisory in Singapore
  • Platform based wealth management and protection products delivered by Old Mutual Wealth in the UK & Italy* and Old Mutual International globally
  • Asset management solutions delivered by Old Mutual Global Investors
  • Discretionary investment management delivered by Quilter Cheviot.

Old Mutual Wealth oversees £119 billion in customer investments (as at 30 September 2016).

Old Mutual Wealth is part of Old Mutual plc a FTSE 100 group that provides life assurance, asset management, banking and general insurance. Old Mutual is trusted by more than 19.4 million customers across the world and has a total of £342.7 billion assets under management (as at 30 June 2016).

*Old Mutual Wealth announced the sale of Old Mutual Wealth Italy to Ergo Italia on 9 August 2016. The transaction is pending completion.

This press release is for journalists only and should not be relied upon by financial advisers or customers. Investments may fall or rise in value and investors may not get back what they put in.