Compliance Corner - HMRC, LGIM

Editorial Staff 1 August 2018

Compliance Corner - HMRC, LGIM

The latest compliance issues in wealth management across the UK, Europe, Middle East and Africa.

UK tax collector HM Revenue and Customs (HMRC) is urging UK taxpayers to come forward and 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.

However, 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.

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).

Once a customer has notified HMRC by 30 September of their intention to make a declaration, they will then have 90 days to make the full disclosure and pay any tax owed.

Several Legal and General Investment Management employees have contacted the UK watchdog Financial Conduct Authority to complain about the company’s “toxic” compliance culture, according to the Financial Times.

The complaints were submitted to the FCA under rules that give whistle-blowers protection. 

At least three employees of the group told the FCA that there is a poor risk culture that starts from senior management in Legal and General’s active-management business.

The report said that one employee wrote that the risk culture of LGIM had become so toxic that trading errors were not reported to senior management. The employees also said that calculation errors around a bond fund’s duration had occurred as well as the misreporting of a client transaction for its USS pension fund.

LGIM declined to comment on the claims, but told the FT that a recent independent review found that the firm had “a positive, respectful, professional and client-focused culture”.

This publication has contacted the firm for a comment, and will update in due course.

Register for WealthBriefing today

Gain access to regular and exclusive research on the global wealth management sector along with the opportunity to attend industry events such as exclusive invites to Breakfast Briefings and Summits in the major wealth management centres and industry leading awards programmes