Think you can hide your money from the taxman? Better think again as new Automatic Information Sharing coming into play next year means the HMRC in the UK, and by extension the majority of tax authorities around the world, will be able to seek out tax evaders almost on auto-pilot.
Over 90 jurisdictions have signed up to sharing your financial information with each other. Details will include property and trusts, bank accounts, investments and so on.
Here is the list of countries sharing information, expect more to be added very quickly:
HMRC view
HMRC have stated. "Under our new regime the small minority who evade tax offshore, facilitate or turn a blind eye to offshore tax evasion will face tougher sanctions." This means anyone attempting to hide their money and their Adviser, Accountant or Bank who have helped them do it.
HMRC has commenced a wave of publicity in the press intended to encourage people to “come to them, before they come to you”. This has been timed to coincide with the ending a disclosure facility on December 31st 2015 and the introduction of heavy new penalties for non-disclosure.
This amnesty has netted a total £1.6bn since opening in 2009 from people coming forward to voluntarily settle unpaid tax and to disclose assets previously hidden.
In the UK Autumn Statement it was proposed that from next year it will be an automatically deemed a criminal offence If you have a tax liability that's related to offshore income or capital gains that you have neglected to declare. Previously, only deliberate non-disclosure was a criminal offence.
How does this affect an Expat resident in Spain?
Beginning in January 2017 Spain (who have signed up to the automatic sharing of information) will commence sending exact bank balances and savings interest received by UK residents. But do not think that keeps you “off the hook” until then, because the information shared will be back-dated to January 2016. Read also our article regarding disclosure of assets here.
Even the ultra-secretive Swiss will cease their fame for banking secrecy by introducing the Common Reporting Standards (CRS) by 2018. Other notable “sharers” are China, Honk Kong, UAE (see the list above).
The use of sophisticated IT systems all “talking” to each other about an individual’s money and tax affairs have truly left nowhere to hide. Unless of course you fancy trying to get your money in and out of the likes of Angola, Venezuela or Kazakhstan!
Get in touch with our experienced Independent Financial Advisers to find out how we can help with legitimate Spanish Tax Compliant Investments and in the meantime download one of our FREE Financial Guides.