Autumn Budget 2017: Requirement to notify HMRC of offshore structures

HMRC issued a consultation document in December 2016 on the requirement for intermediaries/professionals involved in the creation of and/or promotion of complex offshore structures to notify details of the financial arrangements and the clients involved.

Following the consultation, the Organisation for Economic Co-operation and Development (OECD) and the European Union (EU) have published guidance on a multinational standard on how to report and exchange this information between jurisdictions.

HMRC will issue a new consultation on 1 December 2017 to encompass the new developments and provide this information to the OECD and EU in line with the work being undertaken on an international level to ensure transparency across jurisdictions.

The drive for transparency across tax jurisdictions continues across the globe and the introduction of the Common Reporting Standard has set an important precedent for cooperation. Offshore structures are created for a number of reasons, including asset protection and privacy. It seems inevitable that there will be a requirement to notify HMRC of offshore structures, although how to get the balance right and protect the privacy of clients still needs to be considered.