For anyone who has undeclared UK tax liabilities relating to overseas assets, the Liechtenstein Disclosure Facility (LDF) offers the following advantages:
- An LDF disclosure can result in savings of between 50-75% by comparison with other types of disclosure to HMRC. The assessment period only extends back to 1st April 1999 compared with the normal time period of 20 years where there has been tax fraud (or even an unlimited time period in the case of inheritance tax). Undeclared tax liabilities for all tax years up to April 1999 are deemed time-barred so the tax plus interest and the normal penalties - which could be 40% or more of the tax due - are not collectible. Given that tax and interest rates were much higher pre-1999, the resultant overall saving can be between 50-70% for those that qualify.
- No criminal investigation will be carried out. If a full and accurate disclosure qualifies under the LDF and if the source of the funds is not from criminal activity, HMRC will provide a written guarantee not to prosecute for a tax-related offence.
- Your settlement will remain confidential and will not be published in the press. Unlike current procedures for normal disclosures or investigations, HMRC have undertaken not to publish the names of those who disclose under the LDF.
- There will usually be no need to attend interviews with HMRC. During normal disclosures and investigations, HMRC will interview all parties involved on one or more occasions during the process. Such interviews will not normally be held under LDF unless HMRC have reason to question the content of a disclosure.
- Your tax affairs for the period covered by the disclosure will not be under scrutiny in the future. Once a disclosure has been accepted HMRC will issue a clearance certificate which will ensure that no further investigation of your tax affairs up to that point will be carried out. The only exception to this is if it transpires that the disclosure was incomplete or inaccurate.
If you are looking for the best advice - in complete confidence - as to the action you should take, contact our Swiss office today for a free initial assessment of your tax situation.