A deadline is fast approaching for UK non-domiciled individuals to take advantage of a new reporting regime or run the risk of deep intrusion into their financial lives.

Lawyers are warning people with non-domiciled status who live in the UK that they have less than a week to elect to join the country’s alternative reporting regime or run the risk that full details of offshore accounts, trusts and companies are sent to the UK tax authority.

The message comes from Pinsent Masons, the law firm. The deadline to apply to join the reporting regime is 30 May.

UK rules stemming from the US Foreign Account Tax Compliance Act, or FATCA, mean than financial institutions in Crown Dependencies or British Overseas Territories will have to share non-doms’ financial details with HMRC from September 2016.

However, if non-doms elect to join HM Revenue & Custom’s alternative reporting regime, offshore financial institutions will only have to report the details of accounts and trusts which have remitted cash to the mainland UK and not other assets, the law firm said in a note.

The Crown Dependencies are the Isle of Man, Guernsey, and Jersey; and the British Overseas Territories participating in the information exchange are Anguilla, Bermuda, the British Virgin Islands, the Cayman Islands, Gibraltar, Montserrat and the Turks and Caicos Islands.

“Non-doms who fail to act quickly will lose a great deal of anonymity and potentially make themselves vulnerable to lengthy, in depth tax investigations. In many cases these investigations will be unnecessary, and have the potential to generate a lot of disruption, even for taxpayers whose tax affairs are compliant,” Paul Noble, tax director at Pinsent Masons, said.

There is a time lag between the deadline for electing to use the alternative reporting regime and the exchange of information taking place. The information due to be exchanged in September 2016 will cover calendar years 2014 and 2015.

“HMRC will be able to use the additional FATCA information to launch investigations. The level of detail that offshore financial institutions will have to disclose about their clients far exceeds that required in a normal UK tax return. For example, FATCA requires the disclosure of the balances held in each account,” Noble continued.

“Even if the information that HMRC receives through FATCA does not demonstrate that a non-dom has evaded tax, it could still be used as the basis amount to launch investigations into non-doms’ finances. Indeed, most of this information will be irrelevant to HMRC but they will still have access to it, and will seek to use it to their advantage. Advisors should be recommending to any non-dom clients that they elect to the alternative reporting regime as soon as possible.

“Schemes like the Liechtenstein Disclosure Facility allow non-doms to ‘come clean’ about any tax avoidance they have engaged in and, in exchange, gain the right to avoid criminal prosecution. The LDF scheme will close, early, at the end of 2015, and any non-payment of tax discovered subsequently could result in criminal charges being brought,” he added.