More clarity for holders of undeclared Swiss bank accounts

The proposed agreement between the UK and Swiss governments to deal with undeclared Swiss bank accounts raises as many questions as answers on how it will work in practice. If you have concerns over past or future tax liabilities we can help.

Working with HM Revenue & Customs (HMRC) policy team, we've received further clarification on the information released to date. Here are the key points:

Ongoing withholding taxes (WHT)

• Past and future taxes will be dealt with as two separate issues so individuals who declare Swiss assets to avoid the one-off levy will still face ongoing WHT (subject to the below).
• Individuals will be able to avoid ongoing WHT by participating in an 'exemption' facility where they disclose assets.
• Non-doms preferring not to disclose assets will only be subject to WHT on UK source income and taxable remittances.

Information sharing

• Information requests will be initiated by HMRC and based on specific information rather than speculation. There will be no automatic information sharing.
• Individuals moving funds to another jurisdiction between now and 2012 won't have their personal details passed to HMRC.
• Swiss banks will inform HMRC at a high level where funds are being relocated, but not on an individual taxpayer basis.

Offshore structures

• HMRC has yet to confirm how its approach to offshore structures will work in practice. We've expressed concerns of a blanket approach for all offshore structures.

Stolen data

• Reports that HMRC will no longer use stolen data are incorrect and HMRC will be clarifying its position in due course. HMRC forecast that 5,300 enquiries will be made off the back of such information in the next nine months.

We've also summarised the main implications of the UK Swiss deal along with details of how this sits alongside the Liechtenstein Disclosure Facility.