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Get Compliant with HMRC Voluntary Disclosure

On 6 October 2011, the UK Government signed a tax agreement with Swiss authorities regarding the regularisation of existing untaxed assets and introduction of a final withholding tax on future income.

The intention of the agreement is to achieve the level of cooperation between the UK and Switzerland in respect of the taxation of income and gains on relevant assets equivalent to the outcome that would be achieved through an automatic Exchange of Information Agreement.

The objective of the agreement is for the UK and Swiss authorities to provide assistance to each other in respect of:

  • The tax regularisation of relevant assets held in Switzerland by or for relevant persons
  • The effective taxation of the income and gains on relevant assets held in Switzerland by or for relevant persons
  • Further exchange of information by the UK to ensure the effective taxation of Swiss
  • Residents regarding assets in the UK

The requirements of the agreement will come into force on 1 January 2013.

Historical tax liabilities:
Bank accounts opened on 31 December 2010 and 31 May 2013 and held by individual UK taxpayers will be subject to a one-off levy depending on the length of time the assets have been located in Switzerland. This is in lieu of the historic tax liabilities, interest and penalties that might have applied. However, this will have to be agreed with HMRC.

Future Withholding
From 2013 withholding tax will automatically be applied on income and gains derived from Swiss bank accounts. Dividend income will be subject to a withholding tax (Interest amounts that are subject to EU-Savings Tax are excluded from withholding).

Under the Agreement Swiss banks are required to notify customers of the impact on them, their obligations and rights. The levy and withholding tax can be avoided by the taxpayer giving his consent to the disclosure of data to HMRC.

Non-domiciled individuals will need to provide a certificate, produced by a suitable professional, confirming that he/she has verified his/her client’s personal tax return to confirm he/she is non UK domiciled, that he/she has or intends to claim the remittance basis for the relevant years and that the non-domicile status is not in dispute.

Your Options:
Option 1 – Suffer anonymous one off levy (and future withholding) in respect of relevant asset(s)
Option 2 – Authorise disclosure of the income and gains arising on relevant asset(s) to Swiss
Option 3 – Voluntary Disclosure to HMRC using Liechtenstein Disclosure Facility (LDF)
Option 4 – Voluntary Disclosure to HMRC facility other than Liechtenstein Disclosure Facility (LDF)
Option 5 – Move assets but risk future investigation

For a confidential discussion about your options, please email or call us.

Did you Know?

  • Fact Seven

    Thanks to FATCA banks must disclose their American account holders to the IRS or local tax authority.
  • Fact Six

    The IRS is actively looking for non compliant US persons.
  • Fact Five

    It takes an average of 16 hours to do IRS Form 1040.
  • Fact Four

    There are over 500 IRS tax forms.
  • Fact Three

    Since 1916, illegal income has been taxable.
  • Fact Two

    US persons must file tax
    returns no matter where they live and work.
  • Text One

    7 million Americans abroad
    only 500,000 compliant