Taxpayers could face tough penalties if they fail to declare their income on foreign assets before new legislation comes into force.
HMRC is urging UK taxpayers to declare any foreign income or profits on offshore assets before 30 September to avoid higher tax penalties.
New legislation, called Requirement to Correct, requires UK taxpayers to notify HMRC about any offshore tax liabilities relating to UK income tax, capital gains tax or inheritance tax.
Experts are warning that some UK taxpayers may not realise they have a requirement to declare their overseas financial interests. Under the rules, actions like renting out a property abroad, transferring income and assets from one country to another or even renting out a UK property when living abroad could mean taxpayers face a tax bill in the UK.
Mel Stride, financial secretary to the Treasury, said: "This new measure will place higher penalties on those who do not contact HMRC and ensure their offshore tax liabilities are correct. I urge anyone affected to get in touch with HMRC now."
From 1 October more than 100 countries, including the UK, will be able to exchange data on financial accounts under the Common Reporting Standard (CRS). CRS data will enhance HMRC's ability to detect offshore non-compliance.
The most common reasons for declaring offshore tax are in relation to foreign property, investment income and moving money into the UK from abroad. Over 17,000 people have already contacted HMRC to notify the department about tax due from sources of foreign income. Customers can correct their tax liabilities by using HMRC's digital disclosure service.
Once a customer has notified HMRC by 30 September of their intention to make a declaration, they will have 90 days to make the full disclosure and pay any tax owed.
Paul Morris, tax partner at Bishop Fleming, said: "If you have overseas income and assets that have not previously been declared to the UK tax office, there is an opportunity to disclose these before 1 October 2018 to avoid much higher penalties than will be the case after that date.
"From 1 October 2018 there will be eye-watering penalties of up to 200% (double the current amount) on any tax not declared, plus asset-geared penalties of a further 10%. There will be extra penalties where assets or funds are hidden to avoid detection. Taxpayers can also be 'named and shamed'. But with the right advice, these sanctions can be reduced."