HM Revenue and Customs' tax amnesty for individuals with offshore accounts expired in November 2007. But HMRC still has a large amount of information collected from offshore banks relating to individuals who did not come forward. It has therefore decided to follow up and is contacing these holders of offshore bank accounts.

This contact will take one of several forms:

• A letter with an initial enquiry form to enable payment of tax to be made
• A formal notice of enquiry
• The issue of a self assessment return for an earlier year where one was not previously issued
• In exceptional circumstances a criminal investigation.
  

There is no legal requirement to respond to an initial advice letter but anyone ignoring such a request is likely to receive an assessment for the tax the Revenue thinks is due.

The tax amnesty last year gave an opportunity to come clean and the Revenue offered a reduced penalty on unpaid tax of 10%. It is unlikely that it will now take such a sympathetic view.

Typically the areas the Revenue would be focusing on include:

• Bank interest from offshore accounts
• Foreign property rents
• Capital gains on sale of foreign properties

It is recommended that anyone with offshore income or gains they have not disclosed should seek urgent professional advice. It is far better to approach the Revenue with undisclosed income/gains than have them approach you to investigate undisclosed matters.

If you have any queries on how this initiative may affect you, please contact the partner who normally looks after your affairs within Menzies or contact tax@menzies.co.uk for further information