CH53510 - Assessing Time Limits: Extended time limits: 12 year time limit for offshore matters and offshore transfers: Overview
The 12 year time limit only applies for income tax, capital gains tax, and inheritance tax involving offshore matters or offshore transfers.
The 12 year time limit only applies where the lost tax involves an
- offshore matter, see CH53520, or
- offshore transfer which makes the loss of tax significantly harder for HMRC to identify, see CH53530 and CH53540.
Income Tax and Capital Gains Tax
Income Tax and Capital Gains Tax - tax years 2013-14 and 2014-15 only
An assessment to recover under-assessed or over-repaid tax can be made within 12 years of the end of the relevant tax period. This applies where the under-assessment or over-repayment is due to the careless, see CH53400, behaviour of
- the person, see CH51600, or
- another person acting on their behalf, see CH53200.
The 12-year offshore assessing time limit does not apply to earlier periods.
Income Tax and Capital Gains Tax - tax years 2015-16 onwards
An assessment to recover under-assessed or over-repaid tax can be made within 12 years of the end of the relevant tax period. This applies irrespective of whether the person took reasonable care or was careless, but see below for the circumstances where the 12 year time limit does not apply.
Longer time limit may still apply, for example where the behaviour is deliberate the 20 year time limit will apply, see CH56100.
The 12 year time limit does not apply for income tax and capital gains tax purposes where
- before the 4 year or 6 year time limit for making the assessment, HMRC received relevant overseas information, see CH53550, from which they could reasonably be expected to become aware of the lost tax, and
- it was reasonable to expect HMRC to have raised an assessment before the time limit, or
- the loss of tax arose as a result of a transfer pricing adjustment under Part 4 of TIOPA2010.
Inheritance Tax
For inheritance tax proceedings for the recovery of the lost tax can be made within 12 years of the later of the date on which the
- payment or last instalment was made and accepted
- tax or last instalment became due.
Where the chargeable transfer relating to the lost tax occurred on or after 1 April 2013 and before 1 April 2015, the 12 year time limit only applies if the lost tax resulted from carelessness.
Chargeable transfers made before this period are not within the scope of the 12-year time limit.
Where the chargeable transfer relating to the lost tax occurred on or after 1 April 2015, the 12 year time limit applies where there has been no careless or deliberate behaviour of the person or anyone acting on their behalf.
Where the behaviour is deliberate the 20 year time limit will apply.
The 12 year time limit does not apply for inheritance tax purposes where
- before the last date on which proceedings could otherwise be brought, HMRC received relevant overseas information, see CH53550, from which they could reasonably have been expected to become aware of the lost tax, and
- it was reasonable to expect the proceedings before that date.
Further Guidance
You can find details of the time limits that apply for each type of assessment in tables at CH56000+. You should check the appropriate table before making your assessment.
Before you make Extended Time Limit (ETL) assessments they must be authorised by the appropriate Authorising Officer. This will normally be your manager, see CH282070 and EM3257.