Action for UK residents with accounts or investments in Switzerland
Another key date in the groundbreaking agreement between the UK and Switzerland is approaching fast.
By 31 May 2013 UK residents with accounts or investments in Switzerland need to tell their bank whether they will be choosing to pay a one off levy to settle past UK tax liabilities or allow details of the previous activity on their accounts to be passed to HMRC.
The UK/Swiss Tax Cooperation Agreement came into force on 1 January 2013. It is designed to ensure UK tax compliance, either through the payment of charges at source or through the provision to HMRC of detailed information about capital, income and gains, which will then be compared with existing tax records.
At the beginning of the year customers will have been asked to decide whether they wish to pay withholding tax or allow information to be shared with HMRC on Swiss income and gains arising from 1 January 2013 onwards. A similar decision is now required in relation to Swiss income and gains arising from the period up to 31 December 2012.
If customers do not inform their bank of their decision by 31 May 2013, then the one-off levy will automatically apply.
Customers opting to pay the one-off levy in relation to the past will be amongst the first contributors to the £5 billion plus that the agreement is expected to raise in the next 6 years, with an advance payment of 500 million Swiss Francs having been received by HMRC from Swiss Banks in January 2013 in advance of direct deductions from customer accounts.
Where customers decide to authorise details of the previous activity on their Swiss accounts to be provided to HMRC they will also need to consider whether this information is going to tally with what they have previously told HMRC about their tax affairs.
If there is UK tax liability linked to past Swiss transactions which HMRC have not been told about previously, customers will need to take action now to make a voluntary disclosure to HMRC of any outstanding amounts.
Further guidance can be obtained from the HMRC Swiss Agreement webpage
Requests for further advice, or the submission of full details of any disclosure, can be made in writing to:
Offshore Coordination Unit S0987
PO Box 29992
Or online to: Swiss Agreement