The ruling that Barclays must disclose details of offshore accounts held by British residents is set to cause a headache for owners of offshore properties, accountants have warned.

HM Revenue and Customs has won a legal battle against Barclays which means the bank will be forced to disclose details of thousands of account holders in order for the Revenue to recoup £1.5 billion in unpaid tax.

It appears there will be no appeal against the ruling as Barclays has reportedly already confirmed that it will hand over details of its customers' overseas accounts before the end of June 2006.

However, it is not only Barclays customers who are expected to be affected by the decision. A spokeswoman for Barclays is quoted in The Scotsman as saying: "Barclays has not been singled out. This is very much an industry-wide issue and it's our understanding that other financial institutions have been contacted."

The decision means the taxman will be able to scrutinise bank records to find UK-domiciled account holders who have not declared income on money kept in offshore locations like the Channel Islands.

Many of the UK’s 257,000 households with second homes abroad may not realise that assets in offshore accounts are liable to UK tax. Grant Thornton partner, Charlie Hall said: "Failure to properly declare liabilities on overseas assets can lead to substantial charges of interest and penalties as well as the recovery of unpaid tax, and could put individuals in jeopardy of prosecution either in the UK or in the overseas host country."

"Owning an overseas property can also cause real problems in respect of the tax residence status of Britons. Care needs to be taken that the unwary do not land themselves with both unwelcome enquiries and potential liabilities both overseas and in the UK, which can be difficult and costly to unravel."