Financial advisers with clients holding offshore bank accounts could find themselves in a Catch-22 situation, according to Grant Thornton.
The company's senior tax accountant Mike Warburton warned that those advisers who are ignorant of their clients' offshore accounts could fall foul of the law. However, they could also run into trouble when attempting to find out about offshore accounts – meaning that in some situations they are damned if they do and damned if they don't.
"Advisers can break the law if they don't know that their clients are handling the proceeds of crime [such as an undeclared offshore account] and it is also an adviser's job to encourage their clients to come clean voluntarily," he said.
Mr Warburton's warning for advisers to tread carefully comes soon after HM Revenue and Customs (HMRC) found that more people had undeclared offshore accounts than originally thought.
HMRC is getting ready to compel high street banks to hand over details of customers' offshore account details.
According to the Times, HMRC has been attempting "to coax [banks] to shop customers who have failed to declare tax on offshore income".
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