I was just reading the latest updates from the IRS and the new regulation in 2013 from the HIRE act that will impact US citizens abroad. It seems that the UK and it’s similar search for revenue to fund deficit spending is looking to Brits overseas as well. Look out for their newly formed “Affluence Unit”. This in from GlobalEdge
The first target of a new government tax collection task force will be the owners of overseas property, according to a report in the Guardian this morning.
The 200-strong task force named the “affluence unit” is charged with identifying well-off individuals who are avoiding and evading taxes and duties.
Sophisticated “data mining” techniques will be used to uncover information about individuals who own property abroad but may not be paying the right amount of tax. The unit will look for owners of overseas property that on paper appear unable afford to do so based on their income and capital gains declarations.
The good news for most middle class overseas property owners is that the scope of the investigation will initially be limited to people paying the top 50% tax rate (which comes into force for earnings in excess of £150,000 per year).
Comment
It seems that this new unit will focus on top earners with very expensive properties that on paper they seem unable to afford.
This appears to be a tiny target audience – high earners who are poorly advised on tax issues.
The vast majority of the affluent targeted by the “affluence unit” will no doubt be able to avoid scrutiny through offshore vehicles. Call me cynical but this appears to be a strategy designed to grab headlines for political gain rather than a serious attempt to swell government coffers.