Explanatory note

These Regulations specify the territories for the purposes of determining whether a “relevant offshore asset move” described in paragraph 4 of Schedule 21 to the Finance Act 2015 (c. 11) (“the Schedule”) has occurred. Under the Schedule, a person becomes liable to a penalty if there is “relevant offshore asset move” after the relevant time (determined in accordance with paragraph 5 of the Schedule) if the purpose or one of the main purposes of the move is to prevent or delay the discovery by Her Majesty’s Revenue and Customs of a potential loss of income tax, capital gains tax or inheritance tax for which that person is liable for the penalties specified in paragraph 2 of the Schedule in respect of a “deliberate failure” (see paragraph 3 of the Schedule).

A “relevant offshore asset move” occurs upon the happening of any of the three events set out in paragraph 4(1) of the Schedule at the time when the person concerned beneficially owns the asset in question and remains its beneficial owner immediately after. One of the cases occurs where an asset ceases to be situated or held in a specified territory and becomes situated or held in a non-specified territory. Another case occurs where the person who holds the asset ceases to be resident in a specified territory and becomes resident in a non-specified territory. Any territory not specified by Regulations falls as a “non-specified territory” for these purposes.

A Tax Information and Impact Note covering this instrument was published on 10th December 2014 alongside the draft Finance Bill and is available on the HMRC website at http://www.gov.uk/government/collections/tax-information-and-impact-notes-tiins. It remains an accurate summary of the impacts that apply to this statement.