Your manager has had a meeting with Kantar. Kantar recently appointed your firm to be his tax advisers. Extracts from the memorandum recording the matters discussed at the meeting and from an email from your manager are set out below.

Extract from an email from your manager

Please prepare notes for use in a meeting with Kantar. The notes should address the following issues:

(c) Reporting of chargeable gains
Kantar does not intend to report his chargeable gains on his income tax return as he believes that the tax authorities should be able to obtain this information from other sources. Explain the implications for Kantar, and our firm, of Kantar failing to report the chargeable gains to HM Revenue and Customs.

Tax manager

Required: Prepare the meeting notes requested in the email from your manager. The following marks are available:

(c) Reporting of chargeable gains.           (4 marks)