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Liechtenstein Account-Asset Holders
In August 2009, HM Revenue & Customs (HMRC) launched the Liechtenstein Disclosure Facility (LDF) along with a new Tax Information Exchange Agreement (TIEA) with Liechtenstein. The UK and Liechtenstein governments signed a Memorandum of Understanding (MOU) aimed at preventing the evasion of UK tax (via Liechtenstein). In essence, the MOU contained a two-pronged approach: -
1. HMRC would offer a bespoke disclosure facility to allow UK taxpayers to regularise their affairs; and
2. Liechtenstein banks and fiduciary companies would commence a taxpayer compliance programme requiring that UK clients confirm that their UK tax affairs are in order. If not, then the clients would be asked to make a disclosure to HMRC. If a client does not confirm that they have fully complied with their UK tax requirements by 31 March 2015 then the Liechtenstein banks and/or fiduciary companies will end the relationship (i.e. close the account, structure etc).
On this page:
What are the benefits of using the LDF?
The terms offered by the LDF are more beneficial than would normally be secured or negotiated with HMRC as part of any tax disclosure. Real 'tax savings' can be made.
If a taxpayer can benefit from the full terms offered by the LDF (see our FAQs for Existing Liechtenstein Account/Asset Holders and our FAQs for Offshore Account/Asset Holders held outside Liechtenstein for more information) then the advantages include: -
1. A guaranteed immunity from prosecution (if a full disclosure is made);
2. Only taxes/duties due from 6 April 1999 onwards will be charged (i.e. any taxes or duties due for periods before then do not have to be paid); and
3. A fixed penalty of 10% (on all unpaid taxes/duties from 6 April 1999 onwards) will be charged.
The LDF covers all UK taxes and an election can be made to use the Composite Rate Option (40%) rather than different liabilities all being charged on the same monies (e.g. VAT, Corporation Tax, Income Tax, National Insurance Contributions etc).
If it can be established (and agreed with HMRC) that the taxpayer made an 'innocent error' any tax settlement will be restricted to only six years and no penalty will be charged. However, this is not easy to achieve and specialist advice from OneE TDI is essential.
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Who can take advantage of the LDF?
1. Any UK resident taxpayer (individuals, partnerships, companies and trusts) who has undisclosed tax liabilities linked to a Liechtenstein bank account, financial portfolio or structure (e.g. a trust ("Treuhandschaften"), a foundation ("Stiftung") or an establishment ("Anstalt")); and
2. Any UK resident taxpayer (individuals, partnerships, companies and trusts) who has undisclosed tax liabilities linked to an offshore account that isn't held in Liechtenstein can also potentially benefit from the LDF (albeit there are some additional requirements and potential restrictions – please see our FAQs for Offshore Account/Asset Holders held outside Liechtenstein for more information).
Taxpayers are advised to seek specialist advice from OneE TDI before any approach is made to HMRC. They must have 'relevant property' in Liechtenstein before they can apply to register for the LDF.
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Can you use the LDF if you are already under investigation by HMRC?
Yes. You can register for the LDF unless HMRC has already written to you to tell you that you are either: -
The facts of your case will determine which of the LDF's beneficial terms you will be able to secure. Specialist advice from OneE TDI is essential.
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How can OneE TDI help?
The LDF offers taxpayers a real opportunity to bring their UK tax affairs up-to-date without fear of prosecution. Tax (plus a related reduction in interest charges and possible penalties) can also be saved. OneE TDI is currently representing a number of clients who are going through the LDF process. We have successfully settled a number of cases where the clients involved have paid considerably less to HMRC than would potentially have been due. If required, we can also help clients to establish the 'relevant property' they require in Liechtenstein so as to allow them to apply to register for the LDF.
At the core of OneE TDI is a highly experienced team specialising in the management of all tax disclosures. We offer confidential, non-judgemental and invaluable advice and have a proven track record in successfully concluding matters with HMRC on behalf of our clients.
Please see the Testimonials kindly provided by our clients (or their accountants or lawyers), which confirm our levels of client service and expertise in this area.
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How can I contact OneE TDI?
If you would like a free, confidential, no obligation discussion with us please contact either Gary Rowson or Mark Taylor on 0800 652 6156 or complete and submit the online form below.
Whilst we endeavour to provide informative and accurate information, the content on this site is for general information purposes only and should not be taken to constitute tax or legal advice which must always be tailored to individual circumstances. Please contact us if you would like to discuss matters.
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Liechtenstein Disclosure Facility (LDF)