The UK Government has reached agreement with the Swiss Government regarding taxing Swiss bank accounts. Over the last 3 months or so it has been expected that an announcement would be made of a special deal to tax these accounts without disclosing the identity of the account holders.
Full details have not been published as yet but a Press Release was issued this morning by HM Treasury.
The structure of the deal is that Swiss accounts will be subject to a one-off deduction of between 19% and 34% to settle past tax liabilities. This charge will be based on the amount of the capital and length of time the account has been maintained. Those who have already paid their taxes will be unaffected. The Swiss government will make an up-front payment of 500 million Swiss Francs as a gesture of good faith.
From 2013 a new withholding tax of 48% on investment income and 27% on capital gains will be charged on UK residents with funds in Swiss accounts. There will be a new information sharing provision which will make it easier for HMRC to find out about Swiss accounts held by UK taxpayers. The new charges will not apply if the taxpayer authorises a full disclosure of their affairs to HMRC.
The one-off charge on the capital makes this deal considerably less advantageous than using the Liechtenstein Disclosure Facility where tax is payable only on income and gains made in the period from 6 April 1999 onwards with no tax charge on the original source of the capital if this arose before that date.
The information in this article was correct at the date it was first published.
However it is of a generic nature and cannot constitute advice. Specific advice should be sought before any action taken.
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