Finance Act 2015

Valid from 01/04/2016

Penalties for failure to make returns etc U.K.

Prospective

14 U.K. Schedule 55 to FA 2009 is amended as follows.

Prospective

15 (1) Paragraph 6 (penalty for failure continuing 12 months after penalty date) is amended as follows. U.K.

(2) In sub-paragraph (3A)—

(a) before paragraph (a) insert—

“(za) for the withholding of category 0 information, 100%,”, and

(b) in paragraph (a), for “100%” substitute “ 125% ”.

(3) In sub-paragraph (4A)—

(a) before paragraph (a) insert—

“(za) for the withholding of category 0 information, 70%,”, and

(b) in paragraph (a), for “70%” substitute “ 87.5% ”.

(4) In sub-paragraph (6), for “3” substitute “ 4 ”.

16 (1) Paragraph 6A (categorisation of information) is amended as follows. U.K.

(2) For sub-paragraph (1) substitute—

“(A1) Information is category 0 information if—

(a) it involves a domestic matter,

(b) it involves an offshore matter or an offshore transfer, the territory in question is a category 0 territory and it is information which would enable or assist HMRC to assess P's liability to income tax, capital gains tax or inheritance tax, or

(c) it involves an offshore matter and it is information which would enable or assist HMRC to assess P's liability to a tax other than income tax, capital gains tax or inheritance tax.

(1) Information is category 1 information if—

(a) it involves an offshore matter or an offshore transfer,

(b) the territory in question is a category 1 territory, and

(c) it is information which would enable or assist HMRC to assess P's liability to income tax, capital gains tax or inheritance tax.”

(3) In sub-paragraph (2)—

(a) in paragraph (a), after “matter” insert “ or an offshore transfer ”, and

(b) in paragraph (c), for “or capital gains tax” substitute “ , capital gains tax or inheritance tax ”.

(4) In sub-paragraph (3)—

(a) in paragraph (a), after “matter” insert “ or an offshore transfer ”, and

(b) in paragraph (c), for “or capital gains tax” substitute “ , capital gains tax or inheritance tax ”.

(5) After sub-paragraph (4) insert—

“(4A) If the liability to tax which would have been shown in the return is a liability to inheritance tax, assets are treated for the purposes of sub-paragraph (4) as situated or held in a territory outside the UK if they are so situated or held immediately after the transfer of value by reason of which inheritance tax becomes chargeable.

(4B) Information “involves an offshore transfer” if—

(a) it does not involve an offshore matter,

(b) it is information which would enable or assist HMRC to assess P's liability to income tax, capital gains tax or inheritance tax,

(c) by failing to make the return, P deliberately withholds the information (whether or not the withholding of the information is also concealed), and

(d) the applicable condition in paragraph 6AA is satisfied.”

(6) In sub-paragraph (5), for the words following “if” substitute “ it does not involve an offshore matter or an offshore transfer ”.

(7) In sub-paragraph (6)(a), after “matters” insert “ or transfers ”.

(8) Omit sub-paragraph (8).

(9) In sub-paragraph (9), after “paragraph” insert “ and paragraph 6AA ”.

17 U.K. After paragraph 6A insert—

“6AA (1) This paragraph makes provision in relation to offshore transfers.

(2) Where the liability to tax which would have been shown in the return is a liability to income tax, the applicable condition is satisfied if the income on or by reference to which the tax is charged, or any part of the income—

(a) is received in a territory outside the UK, or

(b) is transferred before the relevant date to a territory outside the UK.

(3) Where the liability to tax which would have been shown in the return is a liability to capital gains tax, the applicable condition is satisfied if the proceeds of the disposal on or by reference to which the tax is charged, or any part of the proceeds—

(a) are received in a territory outside the UK, or

(b) are transferred before the relevant date to a territory outside the UK.

(4) Where the liability to tax which would have been shown in the return is a liability to inheritance tax, the applicable condition is satisfied if—

(a) the disposition that gives rise to the transfer of value by reason of which the tax becomes chargeable involves a transfer of assets, and

(b) after that disposition but before the relevant date the assets, or any part of the assets, are transferred to a territory outside the UK.

(5) In the case of a transfer falling within sub-paragraph (2)(b), (3)(b) or (4)(b), references to the income, proceeds or assets transferred are to be read as including references to any assets derived from or representing the income, proceeds or assets.

(6) In relation to an offshore transfer, the territory in question for the purposes of paragraph 6A is the highest category of territory by virtue of which the information involves an offshore transfer.

(7) “Relevant date” means the date on which P becomes liable to a penalty under paragraph 6.

6AB Regulations under paragraph 21B of Schedule 24 to FA 2007 (location of assets etc) apply for the purposes of paragraphs 6A and 6AA of this Schedule as they apply for the purposes of paragraphs 4A and 4AA of that Schedule.”

Prospective

18 U.K. In paragraph 15 (standard percentage reductions for disclosure), in the Table in sub-paragraph (2), at the appropriate places insert—

“87.5%

43.75%

25%”, and

“125%

62.5%

40%”.

Prospective

19 U.K. In paragraph 17(4) (interaction with other penalties and late payment surcharges), omit the “and” at the end of paragraph (b) and after that paragraph insert—

“(ba) if one of the penalties is a penalty under paragraph 6(3) or (4) and the information withheld is category 1 information, 125%, and”.