UK offers limited tax amnesty

Individuals who have evaded tax in the North by placing hot money in the Channel Islands will be offered a limited amnesty by the UK tax authorities if they declare the funds before the end of this month.

The amnesty, which has been described as an "honesty bonus" by tax advisers at PricewaterhouseCoopers (PwC) in Belfast, has been designed to encourage tax evaders to identify themselves before they are contacted by the Inland Revenue.

In return for a voluntary declaration, the tax authorities will exempt the hot funds from inheritance tax. The tax evaders in question will also reduce the penalties they would otherwise face on additional tax debts.

The Inland Revenue is thought to have compiled a list of all UK residents who control undeclared trusts in the Channel Islands. PwC believes that a small number of Northern residents - possibly fewer than 20 - have been named on the list.

PwC has strongly advised tax evaders to take advantage of what it describes as "this one-time deal", even though it has not been publicised by the Inland Revenue.