UK - Swiss Tax Agreement

This Disclosure Facility is now closed. The information on this page is provided for reference.

The UK-Swiss tax agreement comes into effect in 2013

In effect if a UK citizen has a Swiss bank account open on 31 December 2010 and which remains open on 31 May 2013 if they have not given authority for the Swiss Bank to provide details of the account to the UK authorities then the whole of the asset base in the account will be subject to a tax of between 21 and 41%.

This tax will be used by the Swiss Banks to fund a payment to the UK authorities and will in effect be an anonymous franking of certain tax liabilities for the person who has the deduction made. It should be noted that this does not cover all taxes or necessarily all years which HMRC could raise a tax investigation in relation to.

The individual will be sent details of the deduction which they should keep as evidence should the y be subject to tax investigation.

These people will also have withholding tax deducted from any investment income going forward after 31 May 2013.

The HMRC fact sheet relating to the UK- Swiss Tax Agreement is here.

It is important to note that by paying the deduction and the withholding tax this does not exonerate the individual from the risk of a tax investigation or from the potential charge to interest and penalties, merely most tax liabilities relating to the assets on which the charge is made.

If the account holder has given permission for the Swiss Authorities to pass on details of their account to the UK then they will not be subject to a deduction and will not have withholding tax deducted.

Going forward HMRC will be able to request in certain circumstances the Swiss Authorities for information relating to UK residents whom have Swiss Bank Accounts or Investments. This is restricted to the number of accounts and the identity of the provider of the account and it has to be on an individual basis. These requests have to be made by HMRC's Offshore Coordination Unit which was set up to target offshore tax evasion.

It is clear that the G8 and OECD nations are determined that holding offshore assets to assist in tax evasion comes to an end.

HMRC are offering at the moment a number of offshore disclosure facilities are an ideal opportunity for people to regularise their tax affairs (or that of their business). The current offshore disclosure facilities are as follows:

• Liechtenstein Disclosure Facility
• Isle of Man Disclosure Facility
• Jersey Disclosure Facility
• Guernsey Disclosure Facility