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More compliance...

2018 looks set, once again, to be dominated by more compliance measures and below is a brief round-up:

  • The government is to proceed with proposals to introduce a beneficial ownership register for offshore companies owning UK property. A draft Bill will be published in the summer and the register is expected to be launched by early 2021.
  • HMRC has published new guidance on the Serial Tax Avoidance Regime (STAR), which came into effect on 15 September 2016 and imposes sanctions on defeated tax avoidance scheme users. When a scheme which was entered into after 15 September 2016 is defeated (or alternatively when a scheme entered into before that date is defeated after 5 April 2017), HMRC will issue a warning notice that requires the taxpayer to provide them with full information each year on their use of tax avoidance arrangements. If that person then subsequently enters into new avoidance arrangements, they may become liable to penalties, be publicly named, or have their access to direct tax reliefs restricted. The reach of this legislation is, as is often the case, a little wider than you would imagine, in that close associates of those that have had a scheme defeated, companies in the same group and partners in the same partnership (including LLPs), may also be subject to warning notices. Further, although the title suggests this regime will only apply to persistent users of avoidance schemes, taxpayers who have used only one avoidance arrangement that has been defeated will still be caught.
  • The Organisation for Economic Co-operation and Development (OECD) has launched a consultation (now closed) on mandatory disclosure rules targeting intermediaries. The concern is that since the introduction of CRS some advisers and service providers are actively marketing schemes designed to circumvent the CRS reporting requirements. The proposed new rules would create a reporting system similar to UK's Disclosure of Tax Avoidance Schemes (DOTAS) and will require intermediaries to notify their respective revenue authority of such arrangements and also of opaque offshore structures, broadly when created. The EU has also proposed similar disclosure requirements which it is currently intended would come into force on 1 January 2019. The UK has previously consulted on its own proposals but has now confirmed that it will take these forward in conjunction with the EU and OECD.
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DX 53 Chancery Lane

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Email: bh@boodlehatfield.com

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