Harris Lipman News

Liechtenstein disclosure scheme raises £140m

31/08/2011

More than £140 million has been raised following a tax disclosure scheme with Liechtenstein, HMRC has revealed.

The Liechtenstein Disclosure Facility (LDF) was introduced on 1 September 2009 to encourage UK taxpayers who have undeclared investments in Liechtenstein to come forward and make a declaration of the undisclosed income limited to a 10-year period.

Provided a Liechtenstein connection is established, the LDF can be used as an umbrella for the disclosure of any tax liability connected with an overseas asset which has not been set up or opened through a UK branch or agent.

To encourage those who have previously not declared their assets to do so, the LDF is cutting the penalty for previous non-disclosure to 10%, and has confirmed that offenders will not be prosecuted.
Following the cut in the penalty and confirmation of non-prosecution, HMRC has revealed that 1,351 people had come forward by the end of March, compared to 419 in March 2010.

HMRC has predicted disclosures by the end of the amnesty in 2015 will treble a previously predicted yield of £1 billion.

Critics, however, have panned the prediction, pointing to an imminent disclosure agreement with Switzerland, due to be finalised by the end of the year.

It has been claimed that the Swiss agreement will put off investors in Liechtenstein declaring any assets who may ‘wait and see’ if the Swiss deal is more beneficial.

HMRC say the Liechtenstein deal is bringing in tax that would previously have never been paid.
It also believes that it expects the majority of candidates for the scheme to wait until near the end of the disclosure period before revealing their assets.

For further information, please contact Harris Lipman on 020 8446 9000.

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