UK residents with funds in Swiss bank accounts that they have not previously disclosed to HMRC have a significant opportunity to bring their affairs up to date, through the UK/Swiss tax cooperation agreement. Even those who have previously been fully UK tax compliant need to consider their position due to possible withholding taxes being imposed from 1 January 2013.
A tax co-operation agreement between the UK and Switzerland was signed on 6 October 2011 and is expected to come into force on 1 January 2013. Under the agreement, UK residents with funds in Swiss banks will suffer a one-off levy and withholding tax charges, unless they consent to the disclosure of their details by the bank to HMRC (via the Swiss tax authorities).
The one-off levy (of between 21% and 41%) will be applied on 1 May 2013 to Swiss bankable assets held at 31 December 2010. Withholding taxes will be applied from 1 January 2013 on interest, dividends and capital gains on assets held by UK residents.
These charges will be deducted by the bank and paid over to HMRC (again, via the Swiss authorities) without identifying the account holders concerned.
For previously non-compliant taxpayers who wish to avoid the one-off levy and future withholding taxes, a disclosure will need to be made to HMRC.
How we can help
Our Tax Investigations and Disputes team has already helped a number of clients understand the UK tax implications of the UK/Swiss agreement and where necessary, helped make disclosures to HMRC under both the Liechtenstein Disclosure Facility and Contractual Disclosure Facility.
We can help you understand how the UK/Swiss agreement applies to your individual circumstances, explain what options are available to you and their consequences and then assist you in implementing whichever course of action is decided.
As a member firm of Moore Stephens International, we also have access to tax experts in 100 countries across the world, including Switzerland.
For more information, please contact our Tax Investigations & Disputes team.