What is the LDF?
If you possess an offshore bank account or investment, the LDF is a means to voluntarily declare any associated UK tax liability. The LDF is available to individuals, trusts and companies and was originally available until 31 March 2016 but will now be closed to any new registrations on 31 December 2015.
In order to qualify for registration into the LDF, a UK taxpayer must first possess “Relevant Property” in Liechtenstein. This Relevant Property refers simply to assets or investments held in Liechtenstein, and can be obtained by opening a Liechtenstein bank account.
The key terms of the LDF
The LDF offers favourable terms for taxpayers to declare their worldwide assets. If you chose to enter into the LDF you will be requried to:
- disclose all irregularities from commencement or back to 6 April 1999, whichever is the shorter
- pay all taxes due, calculated either by actual rates or the Composite Rate Option of 40%
- pay interest on all tax paid late
- pay a penalty capped at 10% of the tax due for the 10 year period ending 5 April 2009, thereafter 20%
Benefits of the LDF
The LDF is unique to other HMRC disclosure facilities, as it offers guaranteed immunity from prosecution for tax related offenses.
It also enables taxpayers to disclose any worldwide income or gains irrespective of where the asset is or has been located. An example in contrast is that the Jersey Disclosure Facility is only available for income and gains arising from Jersey based assets.
How can Haines Watts help?
Haines Watts will be able to:
- assist you in obtaining the necessary Relevant Property
- register those who wish to make a disclosure to HMRC under the terms of the LDF
- discuss matters with HMRC initially on a no name basis
- calculate the potential tax liability
- determine how matters may be treated and taxed with HMRC
- discuss with you how to proceed with the disclosure
- submit a Report with all the relevant forms completed
- negotiate a full and final Settlement with HMRC as necessary
To get more information on the Liechtenstein Disclosure Facility in a printable format, download our factsheet for The Liechtenstein Disclsoure Facility (LDF).
If you wish to discuss this or any other matter with a member of the team, please contact us.