UK- Liechtenstein Disclosure update
The UK have signed a second ‘Memorandum of Understanding’ (MOU) with Liechtenstein. This follows the introduction last year of the Liechtenstein Disclosure Facility (LDF) which allows penalties on unpaid tax to be capped at 10% of tax evaded over the last ten years.
The LDF commenced on 1 September 2009 and runs until 31 March 2015. Both HMRC and the Liechtenstein authorities expect that by the end of the LDF all UK taxpayers with Liechtenstein investments will be fully tax compliant.
Taxpayers who do not make full disclosures by the end of the programme will find their accounts in Liechtenstein closed down as well as facing penalties of up to 100% on unpaid taxes.
The publication of this memorandum seeks to clarify a number of issues that have arisen since the LDF was first introduced including the following:
- Audit and review procedure;
- Approval of retention procedure;
- Protection of financial intermediaries complying with the MOU;
- Guidance on Liechtenstein entities;
- Clarification on relevant property under the LDF;
- Clarification on the composite rate option under the LDF;
- Clarification on the penalties under the LDF;
- Further steps regarding the UK-Liechtenstein tax convention;
- Rights and duties after 31 March 2015.