Tax & Accounting News

More Taxpayers Can Use Liechtenstein Facility

07/12/2009

The special terms offered to UK taxpayers under the Liechtenstein Disclosure Facility (LDF) are now available to depositors with accounts in other offshore locations who have transferred their funds to the alpine state.

Under a deal signed earlier this year, the Liechtenstein Disclosure Facility (LDF) offers a fixed penalty of 10% of the tax owed, compared to a maximum of 100% that could otherwise apply, and a partial amnesty limiting tax liabilities to periods from 1 April 1999 onwards, where HM Revenue and Customs (HMRC) could normally pursue liabilities going back 20 years.

Crucially, the LDF also offers terms more generous than those of the New Disclosure Opportunity (NDO), which offshore account holders would otherwise have to use to declare their holdings. Depositors with accounts in other overseas locations, who transferred those assets to Liechtenstein by 1 November, have been able to use the LDF from 1 December – the 1 April 1999 deadline and 10% penalty still apply, provided the original offshore account was not opened through a UK branch or agency of a bank.

Many taxpayers are expected to take advantage of the LDF, since HMRC is likely to continue its efforts to sign disclosure deals with other tax havens, and has already said it is unlikely to offer such generous terms as those in the LDF again.

However, moving funds from other countries to Liechtenstein is a complex process and specialist advice should be taken in advance, with particular effort taken to ensure all the information on the form is correct, as HMRC is likely to take a dim view of any errors.

For more information about using the LDF, please contact us.