27 April 2012
The tax co-operation agreement entered into by the UK and Switzerland last year has now been amended by a protocol agreed on 20 March 2012 and a further exchange of letters between the two governments on 18 April. The agreement, as amended, will come into force on 1 January 2013.
The changes made by the two latest documents are as follows.
- The original agreement provides for a 48% withholding tax on interest paid by Swiss banks to UK residents. The protocol adjusts this to take account of the situation where a withholding tax of 35% already applies under the EU Savings Directive (which is extended to Switzerland by a separate agreement).
- The protocol imposes a levy of 40% on the assets held in a Swiss account by an individual who dies on or after 1 January 2013, unless the individual’s personal representatives or beneficiaries consent to disclosure of the details to the UK authorities. This charge will be treated as settling any liability to UK inheritance tax on the assets concerned.
- The exchange of letters increases the maximum rate of the ‘catch-up’ charge under the agreement to 41%.
Our factsheet on the agreement has been updated to reflect these changes and is available here.