LDF and Swiss-UK Tax Agreement
opt for the voluntary disclosure. Table 12 shows the development of Mr Thompson's account balance
as well as the final tax burden formulas calculated using the formula.
Table 12 Case 2 parameters and calculations
Year Account balance | Interest and gains
2002 GBP 2,275,978 | GBP 87,538
2010 GBP 2,864,908 | GBP 69,876
2011 GBP 2,979,504 | GBP 114,596
2012 GBP 3,128,479 | GBP 148,975
Relevant capital
GBP 3,128,479
Total tax burden
GBP 656,981
Applicable tax rate
21%
Mr Thompson has relevant capital of GBP 3,128,479. His tax rate according to the formula is 21%.
Thus he has to pay a total tax burden of GBP 656,981. Penalties and late payment interest are not
owed under this agreement. As was shown 2.4.3, under normal disclosure, Mr Thompson would face a
tax burden of GBP 1,855,668 or 64.8% of the total asset. Thus the Swiss-UK tax agreement would be
cheaper for him.
3.5.3 Case3
Case 3 is the case of Mr Baker introduced in 2.4.4. Due to his address in the UK, and since he had a
bank account at a Swiss paying agent on the relevant dates, he has to pay the one-off deduction or opt
for voluntary disclosure. Table 13 shows the development of Mr Baker’s account balance as well as
the final tax burden formulas calculated us
ing the formula.
Table 13 Case 3 parameters and calculations
Year Account Balance | Interest and gains | Sales income | Rental income
2002 GBP 23,038,226 | -GBP 4,038,040 GBP 120,000 | GBP 36,000
2010 GBP 43,782,078 | GBP 3,231,561 GBP 120,000 | GBP 36,000
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
Relevant capital
GBP 48748062
Total tax burden
GBP 11,402,066
Applicable tax rate
23.4%
75