HMRC Sets Out How It Will Scrutinise Wealthy Britons' Assets, Investments and Overseas Financial Affairs

HM Revenue and Customs (HMRC) has sent letters to wealthy taxpayers asking them to discuss their assets, investments, business interests and overseas financial arrangements as it seeks to build a clearer picture of their tax affairs.

The letters, sent by HMRC's Wealthy Team, invite recipients to meet with dedicated Customer Compliance Managers (CCMs) to discuss their financial affairs. The department says the approach is intended to identify tax risks and help people meet their obligations, although it may still carry out formal compliance checks.

The requests have prompted questions from tax advisers about the breadth of information being sought. Some have also suggested that collecting more details about individuals' wealth could support a future exit tax, but neither the letters nor HMRC's published guidance confirms that such a policy is planned.

What HMRC Wants to Know About Wealthy Taxpayers

The letters ask recipients to discuss their sources of wealth, investments, trusts, companies, partnerships and family office arrangements. They also invite an overview of wider financial affairs, including business interests and entities controlled by the individual.

HMRC says it uses domestic and international data to identify potential tax risks. Its published guidance explains that wealthy individuals can have more complex tax affairs because they may hold investments across several countries.

The department defines wealthy individuals as those with an annual income of at least £200,000 ($267,000) or assets worth £2 million or more ($2.6 million or more) in any of the previous three years. It estimates that around 850,000 people fall into this category. However, that figure represents the wider group meeting HMRC's criteria, not the number receiving the latest letters.

The letters invite recipients to arrange a meeting online or in person. HMRC says discussions may help resolve uncertainties before a formal compliance check, although the department retains the option of conducting one.

Tax Advisers Question the Scope of HMRC's Requests

HMRC told LBC that the number of letters issued was in the low hundreds. A spokesperson said the department had used dedicated compliance managers for wealthy individuals for several years to identify and address tax risks. The recent letters therefore reflect an existing compliance approach, not the creation of a new team.

Tax advisers have questioned how much information HMRC is seeking. Kelly Greig, a partner at Kingsley Napley, described the initiative as a 'sea change,' according to the Daily Mail. Robert Record of Partners Wealth Management suggested that building a clearer picture of assets could have implications for future tax policy.

The letters also follow scrutiny from Parliament's Public Accounts Committee, which criticised HMRC for being unable to provide transparency about how much tax billionaires pay in the UK.

Could the Information Lead to an Exit Tax?

Some advisers have speculated that collecting more information about assets and financial structures could help prepare the ground for an exit tax on people leaving the UK.

Record told The Sunday Times that building HMRC's knowledge of wealth could form part of a move towards such a policy. However, this is his assessment, not confirmation of government plans.

Neither the letters nor HMRC's published guidance announces an exit tax. The department says its approach is intended to help wealthy taxpayers get their tax affairs right while identifying and addressing potential risks.