As a result of the UK-Swiss tax agreement, holders of Swiss bank accounts and investment portfolios who are both resident and domiciled in the UK were given two choices:
1. To accept the deduction of hefty withholding taxes.
2. To authorise the disclosure of their details to HMRC (on the basis that they were either already tax-compliant or would quickly be bringing their affairs up-to-date).
HMRC has now started to receive account details from Switzerland and has begun a process of writing to the individuals concerned. The letters we have seen give three options (with a deadline of 1 November):
- Completion of Certificate A, a declaration that (to the best of your knowledge or belief) you have no outstanding UK tax liabilities in relation to any offshore assets or in relation to the source of any capital used to fund those offshore assets.
- Completion of Certificate B, confirming either that you have registered for the Liechtenstein Disclosure Facility (“LDF”) and have made/are making a disclosure or that you have now instructed an adviser to make an LDF disclosure on your behalf.
- Completion of Certificate C, confirming that you will be making a disclosure of all UK tax irregularities other than through the LDF and that you have either instructed an adviser or will be making your own disclosure.
For many of those affected it should be a simple matter of completing Certificate A. Do note, however, the warning on this – a false statement may lead to criminal investigation with a view to prosecution. If you are in any doubt as to whether you have fully disclosed all matters relating to offshore assets you should take further advice.
We are conscious also that there will be people who, perhaps because of time pressure, indicated their intention to make full disclosure of their liabilities (perhaps via the LDF) but have yet to deal with this. If you fall into this category you have one last chance to act – if HMRC do not have an appropriate response from you by 1 November they are likely to start an investigation (possibly a criminal investigation) into your tax affairs.
As a final point, despite the best efforts of the Swiss banks there will be some account holders who have not received any correspondence because of changes of address etc. If you (or another family member) fall into this category you may have grounds for having the Swiss withholding tax refunded. As with other offshore account holders, we would urge you to then take the opportunity offered by the LDF to regularise your tax affairs once and for all.