Many UK citizens particularly diasporans residing in the UK need to be aware of this mostly unknown HM Revenue & Customs (HMRC) tax on offshore income.
Under this, as stated on the HMRC website gov.uk, the focus is on taxpayers who own property abroad and the government is about to commence a crackdown on defaulters and offenders.
If you’re a UK resident, you’re breaking the law if you fail to tell HM Revenue and Customs (HMRC) about your taxable offshore income. HMRC is getting tougher on those who try to evade tax by hiding their assets or income offshore. We are increasing the size and range of penalties charged, and increasing the number of prosecutions of serious evaders.
Income is considered ‘offshore income’ if it comes from a territory outside the United Kingdom. It includes:
- interest from overseas bank or building society accounts
- dividends and interest from overseas companies
- rent from overseas properties
- wages, benefits or royalties earned outside the UK
Foreign income is anything from outside England, Scotland, Wales and Northern Ireland. The Channel Islands and the Isle of Man are classed as foreign.
This means that Africans with landed properties on which they charge and collect rent, bank accounts and businesses back home but are residents of the United Kingdom are liable to these taxes
Specifically, the HMRC statement, states: Wealthy tax cheats with overseas property are now being targeted by a new 200-strong team of investigators and specialists?.
Provided you have been correctly following the tax rules of both the UK and the country where the property is located you should not have any problems. However, there are people who do not declare their overseas property and income to HMRC, so it is understandable why the authorities have decided to start this investigation.
Whether you need to pay depends on if you’re classed as ‘resident’ in the UK for tax.
If you’re not UK resident, you won’t have to pay UK tax on your foreign income.
If you’re UK resident, you’ll normally pay tax on your foreign income. But you may not have to if your permanent home (‘domicile’) is abroad.