Settlement Opportunity

[downunder]

Incorrect. Whilst there's a reciprocal tax agreement in place, it does not extend to the collection of tax purportedly owed in one jurisdiction being collected in another jurisdiction. Rather, in the current environment it's viewed more as an 'information sharing' agreement between authorities.

Sorry, whilst I wish that was true, it isn't. Both the UK and Australia have signed the OECD Convention on Mutual Administrative Assistance in Tax Matters. Convention on Mutual Administrative Assistance in Tax Matters - OECD

I you read the convention it covers exchange of information but also the requirement that any tax authority must (certain to a some basic conditions) collect the tax of another jurisdiction as though it were there own if requested to do so. That means full powers of recovery and bankruptcy if necessary. I haven't seen any examples of this actually being used, maybe it is and it just isn't made public, or maybe it its rarely used. Not sure either way but the power to collect is definitely there.

[downunder]

From all investigations, research, talking to experts it would appear there is no way out for anyone caught by HMRC. If so then you are one of the very few who will escape the executioner. They will enforce their claim, take your money and no matter what legal challenge comes at them from any group your money will forever remain in their coffers.
Not even moving to Australia can save you as my friend has discovered. Reciprocal tax agreements.
Whether morally correct or even legal, they will take us all down eventually and we will be forced to pay.

The worst of it is that any tax benefit I may have 'allegedly' received all went west when I got divorced so I lose out twice.

Not even sure divine intervention can help.
No point delaying by 30 days or even more. They will have their pound of flesh from us in the end.

Hi kzcomp, can you provide details of what happened to your friend in Aus? Was he contacted by the ATO? Did they collect? Or was he just warned by an advisor that it could happen?

Im in the same boat so Im really keen to hear what your friends experience has been. Thanks!

[jbeer]

Penatlies ?

Hi,

From what I can gather, everyone who is looking to fight this out (and not settle via the CLSO) don't seem overly concerned about potential penalties being applied in the event of unsuccessful litigation.
Is a penalty unlikely or if applied do you think it would be minimal or does anyone know(have a good idea) what worst case scenario would be ?

Thanks
j

[MercladUK]

Hi,

From what I can gather, everyone who is looking to fight this out (and not settle via the CLSO) don't seem overly concerned about potential penalties being applied in the event of unsuccessful litigation.
Is a penalty unlikely or if applied do you think it would be minimal or does anyone know(have a good idea) what worst case scenario would be ?

Thanks
j

There seems to be some precedents already set around penalties which we may be able to use should HMRC try and apply these.

Webberg posted an interesting case recently in the Upper Tribunal

[StrengthInNumbers]

Going for litigation does not mean penalties automatically

[bandemelbs]

Sorry, whilst I wish that was true, it isn't. Both the UK and Australia have signed the OECD Convention on Mutual Administrative Assistance in Tax Matters. Convention on Mutual Administrative Assistance in Tax Matters - OECD

I you read the convention it covers exchange of information but also the requirement that any tax authority must (certain to a some basic conditions) collect the tax of another jurisdiction as though it were there own if requested to do so. That means full powers of recovery and bankruptcy if necessary. I haven't seen any examples of this actually being used, maybe it is and it just isn't made public, or maybe it its rarely used. Not sure either way but the power to collect is definitely there.

Others on this forum have previously referenced the same link. Can you tell me where this is documented exactly as I can only see it relating to the exchange of information, as I originally mentioned. My source informs me that he's never seen or heard of this enacted. There has been the odd high profile case (and I'm not sure they are under similar powers you're referring to), where the individual was sometimes extradited but it usually involved significant sums of money.

[downunder]

Others on this forum have previously referenced the same link. Can you tell me where this is documented exactly as I can only see it relating to the exchange of information, as I originally mentioned. My source informs me that he's never seen or heard of this enacted. There has been the odd high profile case (and I'm not sure they are under similar powers you're referring to), where the individual was sometimes extradited but it usually involved significant sums of money.

If you read the page I linked you'll see the following text:
...all possible forms of administrative co-operation between states in the assessment and collection of taxes, in particular with a view to combating tax avoidance and evasion. This co-operation ranges from exchange of information, including automatic exchanges, to the recovery of foreign tax claims.

Also, if you click the 'amended convention' hyperlink you'll get a copy of the full document. Read Section 2, Article 11 entitled 'Recovery of tax claims' and you'll see the following:

At the request of the applicant State, the requested State shall, subject to the provisions of Articles 14 and 15, take the necessary steps to recover tax claims of the first-mentioned State as if they were its own tax claims.

That's pretty unequivocal. Again, not sure how often its used but the capability is clearly there in black and white.

[bandemelbs]

If you read the page I linked you'll see the following text:
...all possible forms of administrative co-operation between states in the assessment and collection of taxes, in particular with a view to combating tax avoidance and evasion. This co-operation ranges from exchange of information, including automatic exchanges, to the recovery of foreign tax claims.

Also, if you click the 'amended convention' hyperlink you'll get a copy of the full document. Read Section 2, Article 11 entitled 'Recovery of tax claims' and you'll see the following:

At the request of the applicant State, the requested State shall, subject to the provisions of Articles 14 and 15, take the necessary steps to recover tax claims of the first-mentioned State as if they were its own tax claims.

That's pretty unequivocal. Again, not sure how often its used but the capability is clearly there in black and white.

Hmm, interesting. I wonder where they'd go in my case given I have dual citizenship & worked using my rights as an EU Passport Holder. ATO is also slashing 1,000's of positions so not sure where this would rank in terms of priority.

[downunder]

Hmm, interesting. I wonder where they'd go in my case given I have dual citizenship & worked using my rights as an EU Passport Holder. ATO is also slashing 1,000's of positions so not sure where this would rank in terms of priority.

Your nationality is irrelevant. The convention is interested in tax residency. If you're resident in Australia then the ATO can collect tax from you on behalf of any other country signed up to the convention regardless of what passport/s you carry.

The big question is how often is this used. And probably more importantly, will it become more prevalent in the future as tax transparency and cooperation continue to increase.

[bandemelbs]

Your nationality is irrelevant. The convention is interested in tax residency. If you're resident in Australia then the ATO can collect tax from you on behalf of any other country signed up to the convention regardless of what passport/s you carry.

The big question is how often is this used. And probably more importantly, will it become more prevalent in the future as tax transparency and cooperation continue to increase.

Might have to change my name to Starbucks Google .............