LDF and Swiss-UK Tax Agreement
2011 GBP 42,624,616 | -GBP 1,313,462 | GBP 120,000 GBP 36,000
2012 GBP 48,748,062 | GBP 5,967,446 GBP 120,000 GBP 36,000
The expected tax burden would be as follows:
Table 9 Case 3 calculation
Taxes Normal Taxation LDF LDF CRO
IHT on death 40% GBP 1,800,000
IHT 10 year charge | 696 GBP 108,000] 6% GBP 743,798
Income & gains 39.3% GBP 6,264,212
1992 - 1998
Income & gains 39.3% GBP 3,893,704| 39.3% GBP 3,893,704| 40% GBP 3,968,106
1999 - 2009
Income & gains 2010 | 39.3% GBP 1,329,618| 39.3% GBP 1,329,618| 39.376. GBP 1,329,618
Income & gains 2011 | 39.396 -GBP 454,304| 39.396 -GBP 454,304| 5096 -GBP 578,731
Income & gains 2012 | 39.396 GBP 2,403,453| 39.3% GBP 2,403,453| 50% GBP 3,061,723
Late payment 8.5% GBP 1,142,118] 8.5% GBP 609,660] 8.5% GBP 661,361
interest rate
Late payment interest | 5% GBP 225,000
rate inheritance
Penalty 1992 — 1999 | 50% GBP 3,132,106
Penalty 1999 — 2009 | 50% GBP 1,946,852. 10% GBP 396,370| 10% GBP 396,811
Penalty 2009 — 2012 | 50% GBP 1,639,383| 20% GBP 655,753| 20% GBP 762,522
Total tax burden GBP 13,395,534 GBP 5,967,120 GBP 5,297,724
Portion of assets 27.596 12.296 10.9%
Due to the steady income stream from overseas sales and the rental income, as well as the good per-
formance of the investment over the last twenty years,” Mr Baker faces a high tax burden.” Under
normal disclosure, he has to the pay IHT and the ten year anniversary tax as well as income and capital
gains since 1992. Furthermore, he should expect a penalty of 50% or more. In total, he would face a
tax burden of GBP 13.4 million, which is 27.5% of his total assets.
20 Annual return of approx. 6% p.a.
?! Bor the calculation it is assumed that 55% are interest income, 25% are dividend income and 20% are capital
gains on average over the years. He is taxed on the highest possible rate (additional rate).
55