HMRC has sent a record amount of tax information to its counterpart tax authorities in other countries, according to a report by Calum Fuller in Accountancy Age.

Where the UK has a Double Taxation Agreement; or a Mutual Assistance Directive, or a Tax Exchange Information Agreement with another country, then the overseas fiscal authorities (or “fisc’s”, as the taxman likes to call them) can request information from HMRC about UK-based foreign nationals.  HMRC can then supply information from their formidable databases, or even use their information powers to obtain information they don’t already hold, in order to pass it on to the overseas fisc’: for them to use in their own tax investigations.

In 2011/12, Her Majesty’s Revenue and Customs received 1,852 information requests from overseas tax authorities about non-UK citizens living here, compared to 1,564 in 2010/11. Norway made the most requests at 577; followed by France with 225 requests; Spain with 92; and India with 37.  Typically these will be non-UK tax resident and non-UK domiciled individuals.

HMRC is constantly signing new Tax Exchange Information Agreements and updating and extending old ones.  Also, the increasing use of electronic records makes it much easier for the tax authorities in each country to request and to exchange information.  This trend is likely to increase exponentially in future years.

Lynam Tax domicile specialists have decades of experience in dealing with tax residence and domicile issues.

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