In 2011 the UK and Swiss governments signed an agreement to deal with Swiss bank accounts held by UK residents.<\/p>\n
Under that Agreement account holders had a choice \u2013 opt for voluntary disclosure or retain anonymity. The deadline for making a decision was 31 May 2013.<\/p>\n
Under the voluntary disclosure route Swiss banks provide the names of UK resident account holders to HMRC each year. The first disclosure was for the 2012\/13 tax year and therefore it was essential to ensure that income and gains realised on the funds in the account for that year and earlier years had been disclosed to HMRC. Many people chose to regularise matters by using the Liechtenstein Disclosure Facility (LDF). The LDF had the unique advantage of limiting the disclosure period to income and gains earned since 6 April 1999 and a penalty of only 10% was levied on tax due up to 5 April 2009. (Penalties for deliberate omissions are usually much higher and in certain cases can be as high as 200% of the tax due). The LDF also offered a guarantee of immunity from criminal prosecution. A successful LDF disclosure has the advantage of giving clearance on all past tax liabilities on the Swiss account.<\/p>\n
If the account holder opted to retain anonymity a one-off charge was levied on the capital in the account and this was paid over to HMRC. The one-off charge was calculated using a complex formula and the rate of the charge was between 21% and 41%. Income and gains are subject to withholding tax at rates varying between 27% and 48%. The one-off charge does not provide immunity from prosecution and also does not confer clearance for past tax liabilities. It only clears liabilities to income tax, capital gains tax, inheritance tax and VAT where these liabilities relate to the capital balance used to calculate the one-off charge.<\/p>\n
As a result there could still be an exposure to tax in respect of monies previously withdrawn from the account where the withdrawals were not included in the capital balance used to calculate the one-off charge. There could also be a liability to corporation tax if the money deposited in the account had been diverted from a company.<\/p>\n
Even if the one-off charge has been paid it is not too late to regularise matters. The LDF can still be used to put things right and the one-off charge can be used as a credit against tax liabilities. In some cases there may be no further tax to pay but a disclosure under the LDF will give clearance and peace of mind.<\/p>\n
We have dealt with a considerable number of LDF disclosures. If you wish to discuss in confidence then please contact me<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":" In 2011 the UK and Swiss governments signed an agreement to deal with Swiss bank accounts held by UK residents. Under that Agreement account holders had a choice \u2013 opt for voluntary disclosure or retain anonymity. The deadline for making a decision was 31 May 2013. Under the voluntary disclosure route Swiss banks provide the[…] <\/p>\n