UK/Swiss Tax Agreement options
For any UK taxpayer who has an undeclared Swiss bank account, the UK/Swiss Tax Agreement provided a mechanism to regularise a taxpayer’s past tax liabilities. A one-off withholding tax based on the account balance as at 31 December 2010 will have been deducted for the past and a seperate withholding tax is levied going forward.
When did it come into force?
The Agreement between the UK and the Swiss Confederation on cooperation in the area of taxation came into force on 1 January 2013 and the withholding tax will have been deducted from accounts on 31 May 2013.
What happens next?
For those that opted to have the witholding tax deducted in 2013, you have two choices going forwards:
You can allow all future income and gains to be subject to an annual witholding tax deduction at the rates detailed below.
You can chose to make a disclosure to HM Revenue & Customs at any time, thereby preventing further witholding tax deductions.
How much is the withholding tax?
Various rates of tax can apply depending upon the nature of the asset and income/gains generated.
For the past, the minimum rate was 19% and the highest rate was 41% depending upon the type of asset . The minimum rate was increased to 21% on 18 April 2012.
For the future, 48% will apply to interest, 40% dividends and 27% to capital gains.
What are the benefits of witholding tax?
The account holder can remain anonymous.
Making a disclosure
If you chose to make a disclosure, you can make use of one of the various Disclosure Facilities that may be available, such as the Liechtenstein Disclosure Facility.
To get more information on the UK/Swiss Tax Agreement in a printable format, download our Factsheet.
If you wish to discuss this or any other matter with a member of the team, please contact us.