• Offshore Tax Health Check

    Two years ago, we launched this service. (We have reproduced our original post below.)

    To celebrate our birthday, we are reinstating our offer for this month only - FREE initial consultation and Half-Price for first half-day.

    At the time, Jimmy Carr's tax avoidance was high in the media. HMRC had just issued a paper on Tax Evasion. The tax world has moved on from then. New celebrities are in the tax avoidance spotlight. Automatic exchange of tax information is the new norm. HMRC have got increased powers. The need for an OTHC is even greater.

    But our contact details remain the same - bernardokelly@fiostax.com or 00 44 1624 614955.

    First published on 1 October 2012


    Who Should have an Offshore Tax Health Check (“OTHC”)?

    1) Anybody who has done offshore tax planning where the Revenue have not yet finalised the position.

    2) Any financial advisor who has a client who has done offshore tax planning

    What is an Offshore Tax Health Check?

    Your doctor gives you a medical check-up. An OTHC is a Tax Check-up done by a specialist offshore tax advisor. Its purpose is to

    a) Identify any changes in legislation, case law or practice since implementation

    b) Identify any weaknesses in implementation

    c) Advise on any remedial or necessary action

    Why have an OTHC?

    HMRC has increased its focus on offshore matters. This is evidenced most recently by the document on Tax Avoidance where the cover has the word “Offshore” emblazoned on it.

    The media has contributed to this e.g. its concentration on the Jimmy Carr affair.

    How do we work?

    We work hand-in-hand with existing advisors. If the original promoter of the tax planning is still around, then we liaise with him or her. We work with your accountant, tax advisor or IFA. Our intention is to supplement the advice they give in the specialist area of offshore tax.

    We are happy to work from your office, your advisor’s office or our office.

    How much does it cost?

    Normally we would calculate our fees on a time basis but we always endeavour to quote you a fixed fee.


    Our initial “desk” review is free. During this review we gather basic information, ensure that we can help, identify what further documents and information we require and quote a fixed fee for the initial report. The “desk” can be in our office or yours.


    As an introductory offer we are willing to give 50% off our standard fees for the first half day. Normally £1,200 reduced to £599.

    Together, the FREE initial review and the Introductory Offer would normally be enough time to produce an initial report.

    Contact Bernard O'Kelly on bernard@fiostax.com for more details.



  • 3 Years On - Changes in the Offshore Tax World

    Three Years On

    We set up Fios 3 years ago. On 5th July 2011 to be precise. Happy Birthday to us.

    Have things changed? Have they what? Arguably, there has been more change in the Offshore Tax world in the last 3 years than ever before. Here is a quick rundown but firstly my apologies for any omissions. Please feel free to add any that I have forgotten.

    Cause Celebre

    Celebrities have always engaged in tax planning. They are among the highest earners in the country and it is no surprise that they want to shelter some of that income. The big change has been the media chasing them followed by the public (and sometimes political) outrage. The Jimmy Carr and K2 tax scheme story broke in June 2012. Even David Cameron got in on that story. But he wasn't the only celebrity to run into tax trouble. In recent days, various other celebrities were named as having taken part in the Liberty tax scheme. This scheme first hit the headlines in October 2012 when The Times reported it.

    Read more ...


  • CGT For Non-Residents


    One of the endearing (and perhaps unique) features of the UK tax system has been that non-residents are generally not subject to CGT on most UK assets. The thin edge of the wedge started with the introduction of ATED (Annual Tax on Enveloped Dwellings) with its related tax charge. Last year, the UK Government announced that it was going to change the CGT position on residential property owned by non-Residents. Last Friday (28 March 2014) the Government issued a Consultation Document. It sets out their thoughts.

    Consultation Document

    The changes are due to come into effect on 6 April 2015. Only gains arising from that date will be caught by the new changes. The consultation period ends on 20 June 2014. After that there will be further consultations on the wording, etc of the legislation.

    Proposed Changes

    Residential Property only

    However, the definitition of Residential Property is different to that in the ATED legislation. For example, it includes investment property and multiple-occupancy dwellings. Nursing homes, etc are excluded.

    Does not apply to Shares

    Other than where companies are being used to avoid this new charge, there is no intention to extend CGT to shares owned by non-Residents.

    Indirect Ownership Caught

    Residential properties owned by offshore trusts will be caught as will all residential properties owned in offshore companies. The minimum value used in ATED (currently £2m but dropping to £0.5m) is irrelevant.

    Reliefs and Exemptions

    Funds where there is a Genuine Diversity of Ownership ("GDO") will be exempt as will REITs.

    Private Residence relief will be available to non-residents where appropriate but the method of claiming this will be amended to stop non-residents from simply claiming the relief on their UK residential property even though their main home is elsewhere.

    Annual CGT exemption will be available to non-Residents.

    Rates and Collection

    The normal CGT rates will apply i.e. 18% and 28%.

    The tax is to be collected by solicitors, accountants, etc withholding tax and accounting for it to HMRC. A self-declaration option is also likely.


    In summary, the proposed changes will significantly alter the way in which non-residents invest in UK property. Undoubtedly, new structures will evolve once more information is available.




    Isle of Man Disclosure Facility Better than that of Jersey or Guernsey

    On 19th February 2013, the Isle of Man published the Manx Disclosure Facility ("MDF"). (Others call it the IoMDF, but that sounds too boring.) A month or so later, Jersey and Guernsey signed a similar agreement with HMRC and published late last week.

    Since the introduction of FATCA in the US, the automatic disclosure of information has become an inevitable norm. But has the Isle of Man been rewarded for its leadership in being the first of the Crown Dependencies to agree with HMRC? In particular, is the Disclosure Facility more favourable than that of Jersey or Guernsey?

    The broad thrust of all three agreements is the same. But the limitation of penalties appears to be more favourable in the MDF.

    In the MDF, the 20% penalty applies to penalties for Inaccuracies on Returns (Sch 24 FA 2007). In the JDF and GDF, the 20% penalty rate applies to Inaccuracies on Returns (Sch 24 FA 2007), Failure to Notify HMRC of Liabilities (Sch 41 FA 2008) and Failure to Make Returns (Sch 55 FA 2009). But in the absence of falling into any other category, the default penalty rate is 10%.

    Does it mean that those who avail of the MDF will have a lower penalty for Failure to Notify and Failure to Make Returns? Probably only time will tell if there is a real difference in practice.




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