UK Swiss Tax agreement
Worried about making tax disclosure?
Contact our private client partners on a confidential basis and they will guide you through your options
On 6 October 2011, the Governments of Switzerland and the UK signed up to a tax agreement which is due to be enforced from 1 January 2013. For those who have ‘bankable’ assets in Switzerland, there are various options available depending on whether the income and gains have been declared or not. Swiss financial intermediaries are currently contacting UK residents who are affected by the agreement to get a decision as to how to proceed before that deadline approaches. The important points to note are:
- The agreement applies to all individuals who have a UK resident address.
- It affects both past and future tax liabilities.
- The impact of the agreement is that a lump sum levy of up to 41% of the funds in a Swiss account will be taken if you do nothing.
As there is no specific disclosure facility attached to the UK Swiss tax agreement, the option of the Lichtenstein Disclosure Facility (LDF) is likely to be a consideration for many. If you are able to register under the LDF, there are some real benefits of using this route, mainly:
- Limiting liabilities back to 6 April 1999
- A fixed penalty of 10% or 20% on the tax due
- Immunity from prosecution
We have experience of completing the LDF for individuals and liaising with HMRC once the disclosure has been made.
What are the options?
Click on our simple chart below to see the impact of the agreement for you:
How we can help
We can talk you through the options available to you and the processes involved, so that you can decide what the best action is to take for you and your family. It can be difficult thinking about where to start and we appreciate that everyone’s circumstances are different. What works for the majority may well not work for you. Many UK residents have enjoyed the benefits of privacy protection in the past but securing access to the funds after their death has been a worry.
We appreciate that individuals are likely to be concerned not only with the one-off levy, but also the fact 40% withholding tax that will be deducted on death in lieu of inheritance tax if a full disclosure of assets is not made to HMRC. There may then be inheritance tax planning that can be done in the UK on these assets if disclosure is made and timing could be crucial to achieve the desired result.
There are certain conditions to qualify under the LDF which we can guide you through.
If you are non-UK domiciled, there are further options available and it will depend on your personal circumstances, for example whether you are on the remittance basis for UK tax purposes. We would be happy to talk to you on a case by case basis to go through your options.
For more information please contact us and rest assured this will be on a confidential basis.
Experience and technical excellence
Mercer & Hole are ranked in Private Client Practitioner’s Top 25 UK Accountants for 2013. Our private client partners have obtained valuable experience in this area and can answer your questions and the options available to you in a clear and concise manner.
Within our private client team we have fluent speakers in German and French and our partners have already helped a number of people understand the UK Swiss agreement, the LDF and, where appropriate, voluntarily disclose of unpaid UK tax liabilities to HMRC.
Speak to us
Contact any of our private client partners and we can arrange to see you for an initial free confidential, no obligation consultation at any of our Mercer & Hole offices.
