Leichtenstein Offshore Disclosure Facility

  • The disclosure facility will run from the 1st September 2009 until 12 March 2015
  • All Liechtenstein financial intermediaries will have to review all their clients and identify those who need to confirm their tax positions with HMRC and advise them of the timeframe.
  • The UK investor will need to confirm to the financial intermediary that they are co-operating with HMRC. They will be subject to financial sanctions within Liechtenstein if they fail to comply. The penalty on unpaid tax will be limited to 10% in most cases on the same basis as the above UK NDO
  • The recovery of unpaid tax will be restricted to a maximum of ten years to 5 April 2009
  • The taxpayer can elect for a special composite rate of 40% to cover all taxes on an annual basis without the benefit of any relief or deduction

If you disclose accounts held in Liechtenstein, HMRC will also want to use this opportunity to review the whole of your business affairs and root out all irregularities. It is therefore essential that you review all of your financial affairs now, to ensure you do not receive the threatened penalty of up to 100% of the tax evaded.

Key Dates and Deadlines

Relevant Assets

Assets held in Liechtenstein at 1 August 2001 – 1 September 2009 and 31 March 2015

Time limits – you have 18 months from the date you received notification from your financial intermediary to satisfy them that you are co-operating with the UK tax authorities.

Within the 18 month period you must:

  • Tell HMRC that you have received a notice from your financial adviser (if you receive one) and that you intend to take part in the LDF. HMRC will then issue a registration certificate within 30 days
  • Send the certificate to financial intermediary within 30 days
  • Send the full disclosure to HMRC within 7 or 10 months
  • HMRC will send a disclosure certificate within 30 days providing the disclosure is complete
  • Send the disclosure certificate to the financial intermediary within 30 days of receipt

Penalties

10%

Period Covered

10 years to 5 April 2009

What do you pay?

Tax, Interest and Penalties (The tax can be calculated by using a composite rate of 40% in lieu of all taxes

Which taxes are covered?

All taxes including income tax, corporation tax, PAYE, capital gains, VAT, Inheritance

Who cannot use the LDF?

  • Those who are already under investigation at the date of the Memorandum of Understanding (MOU)
  • Those who were previously under investigation and who knowingly did not disclose their interest in any relevant property (they can participate but all not benefit from the limited penalty
  • Those previously contacted under the ODF or NDO (they can participate but will not benefit from the limited penalty (the limited penalty will not however be higher than the NDO (20%)
  • Those who have a bank account including a financial account outside the UK or Liechtenstein which was opened through a UK branch or agency (they can participate but will not be eligible for the shorter limitation period, or the fixed penalty or the composite rate)

Will I be prosecuted?

No, if you are accepted as falling within the LDF disclosure facility and you make a full and accurate disclosure and the source of the funds is not criminal activity as determined by the Proceeds of Crime Act 2002 (in this case also excluding tax evasion).

What is the situation with my financial intermediary?

If you have been contacted by your financial intermediary you will need to provide them with one of the following:

  • Written confirmation from a legal, tax or accountancy adviser that you have complied with UK tax obligations or have applied to disclose under another tax disclosure facility
  • Evidence to prove you have already met your UK obligations with regards to Liechtenstein investments
  • A certified copy of your self assessment return showing your Liechtenstein investment
  • Registration and disclosure certificates which we will send to you if you register and make a full disclosure to HMRC under LDF

If you have not been contacted by your financial intermediary you still have a requirement to disclose any taxed liabilities.

What information to I have to provide to register?  

  • Your name, address and date of birth, a copy of your passport, birth certificate etc.
  • Your National Insurance number and other Unique Taxpayer reference (UTR) (if you have one)
  • Information and documentation showing you are eligible to use this facility
  • Full details of all undisclosed tax liabilities from 6 April 1999
  • A statement setting out whether the composite rate or actual tax basis is being used
  • Information demonstrating the liability
  • A declaration that the disclosure is full and complete
  • The contact details of the professional adviser
  • The payment of tax, interest and the penalty