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What is the Worldwide Disclosure Facility and does it affect me?

12 May 2023 • HMRC

Important information for UK residents who have received, or are still receiving, income from overseas:

UK tax residents are often unaware that overseas income and gains they receive may need to be reported to HMRC. This could include income from bank accounts, pensions, shares, land or property that they own in another country (including a property that’s been someone’s primary residence) – even if tax has already been paid in the country where the income arose.

With an increase in fiscal and land ownership data sharing internationally, HMRC is increasingly aware of the overseas financial interests of UK residents. The Worldwide Disclosure Facility is HMRC’s method of allowing taxpayers to declare income and gains that have not been previously reported.

Prompted vs unprompted disclosure

In some cases, these overseas interests come to HMRC’s attention before being declared and the UK resident receives a letter requesting clarification of possible international earnings or assets. Declaring overseas income to HMRC ‘unprompted’, i.e. before a letter has been received, typically results in a more favourable settlement with lower penalties. Once there has been a prompt from HMRC and a Worldwide Disclosure letter has been received, although increased penalties may be due, there can still be an opportunity to negotiate with HMRC.

For anyone unfamiliar with the process, understanding which details and calculations need to be submitted, how to submit them and the timescales that need to be adhered to, can be daunting. This is in addition to the challenges associated with having to find your way around HMRC’s forms, proposing a penalty percentage, and managing the to-and-fro negotiations.

How we can help

We can help you identify any potential areas that may require clarification and begin the process with HMRC, including comparing the actual tax paid against what may have needed to be paid, advising on available tax credits, and communicating with HMRC on your behalf to negotiate a fair settlement figure.

If this is something you think may apply to you, or you’d like to discuss your situation relating to the Worldwide Disclosure Facility, please contact Freddie Hollom on 020 7731 6163 or email (info@warrenerstewart.com) and we will get back to you.

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