Section 36A: Loss of tax involving offshore matter or offshore transfer, Taxes Management Act 1970

This section applies in a case involving a loss of income tax or capital gains tax, where—

the lost tax involves an offshore matter, or

the lost tax involves an offshore transfer which makes the lost tax significantly harder to identify.

Lost income tax or capital gains tax "involves an offshore matter" if it is charged on or by reference to—

income arising from a source in a territory outside the United Kingdom,

assets situated or held in a territory outside the United Kingdom,

income or assets received in a territory outside the United Kingdom,

activities carried on wholly or mainly in a territory outside the United Kingdom, or

anything having effect as if it were income, assets or activities of a kind described above.

Lost income tax or capital gains tax "involves an offshore transfer" if—

it does not involve an offshore matter, and

the income or the proceeds of the disposal on or by reference to which it is charged, or any part of the income or proceeds, is transferred to a territory outside the United Kingdom before the relevant date.

In subsection (4)—

Where lost tax involves an offshore transfer, the cases in which the transfer makes the lost tax significantly harder to identify include any case where, because of the transfer—

HMRC was significantly less likely to become aware of the lost tax, or

HMRC was likely to become aware of the lost tax only at a significantly later time.

But an assessment may not be made under subsection (2) if—

before the time limit that would otherwise apply for making the assessment, HMRC received relevant overseas information on the basis of which HMRC could reasonably have been expected to become aware of the lost tax, and

it was reasonable to expect the assessment to be made before that time limit.

In subsection (7)(a) "relevant overseas information" means information which is provided to HMRC by an authority in a territory outside the United Kingdom under—

any provision of EU law relating to any tax, or

an agreement to which the United Kingdom and that territory are parties, with or without other parties.

An assessment may also not be made under subsection (2) to the extent that liability to the lost tax arises as a result of an adjustment under Part 4 of TIOPA 2010 (transfer pricing adjustments).

In this section "assets" has the meaning given in section 21(1) of the 1992 Act, but also includes sterling.

Section 36(2) to (3A) applies for the purposes of this section (as if references to section 36(1) or (1A) were to subsection (1) of this section)."

Section 36A: Loss of tax involving offshore matter or offshore transfer

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