TaxAdministrationSwiss deal drives taxpayers to Liechtenstein amnesty

Swiss deal drives taxpayers to Liechtenstein amnesty

Information exchange agreement with Switzerland could drive taxpayers to Liechtenstein amnesty

The UK’s groundbreaking deal to exchange tax information with Switzerland
could drive secret offshore account holders to use the Liechtenstein Disclosure
Facility (LDF), advisers have said.

The LDF has had a relatively slow uptake since it began last year, but UK
taxpayers with undeclared income in Switzerland may rush to move their assets in
the wake of the agreement.

The deal could also pave the way for the UK and Switzerland, famed for its
impenetrable banking secrecy, to adopt a similar disclosure facility to the LDF.

The predictions have been made after George Osborne announced the pact
alongside Swiss finance minister Hans-Rudolf Merz.

Asked whether the Swiss deal could inadvertently increase uptake of the LDF,
Gary Ashford, head of tax risk, disputes and investigations at RSM Tenon said:
“I think the answer is yes.”

For Swiss account holders with UK tax liabilities who have so far snubbed the
LDF, they may face stiffer penalties if they rush to use a similar amnesty in
Switzerland.

“There may very well be a Swiss Disclosure Facility on the cards and for
those [UK-resident account holders ] who sit back and do not use the LDF they
may find it harder to use the Swiss version if it is established,” Ashford
added.

Despite a £900m boost to combat tax evasion, HMRC will still have to process
the wall of information that will come out of Switzerland amid dwindling staff
numbers.

Recently, confidential account information has been stolen by employees of a
number of offshore banks before finding its way to several European tax
authorities.

In this backdrop, John Cassidy, tax investigation and dispute resolution
partner at PKF, said: “Holders of Swiss accounts cannot assume their accounts
will remain confidential for ever.

“An amnesty for accounts based in Switzerland is possible – but there is no
guarantee that any future amnesty will be as generous as the current
Lichtenstein Disclosure Facility.

Read more:

Swiss
offshore tax deal

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