The Liechtenstein Disclosure Facility
The Liechtenstein Disclosure Facility (LDF) provides a framework to assist UK taxpayers with investments in Liechtenstein – that have not been taxed – to make a full disclosure to HMRC. The agreement allows penalties on unpaid tax to be capped at 10% of tax evaded over the last ten years. The LDFwas launched on 1 September 2009 and will run until 5 April 2016.
A recent update from HMRC shows the cumulative total yield from the LDF since the facility was introduced until the end of December 2014. Since 2009, more than 5,100 settlements have been reached with an average settlement figure of £173,000. In total the LDF has raised more than £1.1bn from settled cases and payments on account. A number of changes to the terms for using the LDF were made in the latest joint declaration published in August 2014.
The declaration states that access to the terms of the LDF will be restricted under the following circumstances:
- Where the relevant person enters the LDF to settle liabilities HMRC is already aware of.
- Where the issue being disclosed has already been subject to an intervention that started more than three months before the date of application.
- Where there is no substantial connection between the liabilities being disclosed and the offshore asset held by the relevant person as at 1 September 2009.