Tax information

The number of requests for information about UK-based foreign nationals by foreign countries investigating tax evasion is on the up as governments around the world attempt to recover more tax.

International law firm Pinsent Masons says the number of requests for information about taxpayers received by the UK government from overseas tax authorities surged by 18% in the last year.

In 2011-12 (year ending 31 March), HMRC received 1,852 requests for information about individuals from overseas authorities under ‘Double Taxation Agreements’, compared to 1,564 in 2010-11.

Pinsent Masons director, Phil Berwick, said:

‘The jump in requests shows there are very few places to hide for wealthy individuals who may be trying to avoid tax by moving their assets around the globe. International borders are increasingly meaningless for tax authorities’ pursuit of outstanding taxes.’

‘London attracts ultra-high net worth individuals from a huge range of countries, and the expertise of London in wealth management makes it a stable ‘haven’ for individuals looking to protect their assets from political or economic instability overseas.’

‘As individuals move their assets to the UK, their home tax authority will take a keen interest in how those assets have been taxed.’

From the data available, Norway led the most requests for information league table in 2011 with 577 requests, followed by France with 225, Spain at 92, and India with 37.

Norway has recently been pursuing a diverse series of international tax investigations, from carbon tax fraud to tax evasion by budget airline pilots, and has recently been locked in a dispute with Jersey over the disclosure of tax arrangements.

Berwick added:

‘The presence of France and Spain in the top five countries requesting data isn’t surprising. Faced with the prospect of tax increases, it looks like some of France and Spain’s wealthiest individuals have gratefully accepted David Cameron’s offer to ‘roll out the red carpet’ for them.’

According to French consulate estimates, London is home to around 400,000 French citizens, making London the 6th largest ‘French’ city.

Currently, over 100 countries have signed a Double Taxation Agreement with the UK.