The requirement to correct (RTC) regime imposes significant new penalties for failing to correct any offshore tax non-compliance for periods up to 5 April 2017 before 30 September 2018. The scope of RTC is wide and applies not only to income tax and capital gain tax, but also to inheritance tax. Historic IHT liabilities could be unexpectedly caught by RTC, for example in EBT settlements where income tax liabilities have been agreed with HMRC but IHT has not been considered as part of the settlement, or where it could be argued that there is an additional settlor(s) unbeknown to trustees. Trustees, settlors and beneficiaries correct historic issues in the most appropriate way, for example by using HMRC’s worldwide disclosure facility.
