This regime focuses on the assessment of cases involving loss of tax from offshore income, gains or chargeable transfers and we will see the time limit increase to 12 years for Income Tax, Capital Gains Tax and Inheritance Tax.
This increases the existing time limits of 4 years, or 6 where the loss of tax is due to carelessness, after the end of the year of assessment (or date of the chargeable transfer) to which it relates.
Where the taxpayer has sought to deliberately evade tax, the time limit will remain 20 years.
In respect of Income Tax and Capital Gains Tax, the amendments will have effect in relation to assessments from 2013 to 2014 in cases where the loss of tax is brought about carelessly, and from 2015 to 2016, and subsequent years, for other cases (where not already subject to the 20-year time limit).
In respect of Inheritance Tax, they will apply to chargeable transfers taking place on or after 1 April 2013 where the loss of tax is brought about carelessly, and 1 April 2015 for other cases not subject to a longer time limit.
Organisations will need to determine how long they should hold on to information in light of the new time limits and they must also have robust data protection policies, whether they hold information for 4 years, 20 years or any period in between.
Contact our Tax Manager for more information on this change.