Swiss account holders not guaranteed immunity

THE AGREEMENT between UK and Switzerland offers no guarantee of immunity to prosecution for UK residents who pay the one-off charge on the capital in their bank accounts.

The deal, which was signed yesterday, imposes a one-off deduction of between 19% and 34% on the capital in the Swiss accounts and a withholding tax of 48% on investment income and 27% on gains from 2013.

The agreement said it was “highly unlikely” that people making a disclosure under the agreement will be subject to a criminal investigation. However, advisors have pointed out that this is in contrast to the Liechtenstein Disclosure Facility, which specifically guarantees an immunity to prosecution.

Gary Ashford, national head of tax investigations at RSM Tenon, said: “Since the deal was announced HM Revenue & Customs has faced much criticism that it represents an ‘amnesty for tax fraudsters’. The text of the deal leaves them with plenty of routes to pursue Swiss account holders guilty of serious crimes if they choose to do so. This applies even to those who pay the one-off tax on their Swiss account balances or who disclose their account information voluntarily.”

The agreement allows HMRC to pursue individuals whose assets are the proceeds of tax related or non-tax related crime, he added.

Sean Wakeman, tax investigations partner at Crowe Clark Whitehill, said that this agreement does not provide a guaranteed penalty rate for a full disclosure of funds.

“There are three options for account holders in Switzerland: disclose, pay the one-off charge and withholding rate, or move your money elsewhere. But there is not much detail about what you will pay if you make a full disclosure,” he said.

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