Liechtenstein deal offers 'biggest tax giveaway in 30 years'
The Liechtenstein Disclosure Facility is the biggest tax giveaway in 30 years and advisers should consider using it to bring clients’ offshore money back to the UK, according to tax advisers Crowe Clark Whitehill.
The LDF is an HMRC scheme, run in conjunction with the Liechtenstein government, which offers an effective amn-esty on funds held in offshore accounts around the world.
The arrangements mean after full disclosure, a fine of up to 20 per cent of tax due will be levied instead of 100 per cent, with tax interest and penalties only sought for the previous 10 years rather than the previous 20.
Provided clients establish a connection with Liechtenstein, by opening a bank account, for example, the LDF can be used to declare overseas assets held in any jurisdiction. Assets do not need to be transferred to Liechtenstein to qualify.
CCW tax investigations partner Sean Wakeman says: “This is the biggest tax giveaway for 30 years. The benefit for advisers is that they can use it to essentially clean up and repatriate offshore money. It is an offer that is too good to refuse.
“The reality is, once you have factored in fine reductions you would have received for cooperating with disclosure, you will end up paying around 20 per cent of what you would have without this scheme.
“Any tax that is owed bef- ore April 6, 1999, apart from the interest earned on that money after then, is waived and forgotten.”
Research by CCW shows that one-fifth of accountants have never heard of the scheme and Wakeman says the proportion of advisers may be even higher.
He says: “HMRC needs to bridge the knowledge gap through more extensive publicity to support the effort it has made with bigger accountancy firms.”