LDF and Swiss-UK Tax Agreement
a cooperation, company or another entity with relevant property, or has received more than 5% of the
profits of such an entity. ^
The definition of beneficial interest covers a wide range of evidence. The definition goes further than
that for beneficial interest as covered in other agreements like the US Offshore Voluntary Disclosure
Program (2009) and Initiative (2011).'” The reference to the due diligence forms demonstrates
HMRC' intention to establish a loophole-free definition. From a legal point of view, this is under-
standable. On the other hand, from a practical point of view, these broad definitions may require huge
efforts by an FI. The effort should not be underestimated, especially for small and medium trust agen-
cies, since most due diligence forms are only available in paper form for security reasons. The re-
quirement to check all mandates requires time and generates costs which cannot be shifted to every
client.
2.3.3.5 Schedule 3: Notification Procedure
The FI has to notify relevant persons within 3 months of making their identification. ^ The working
group of the FI and HMRC agreed on a standard letter to be sent to relevant persons.'" The relevant
person has to inform the FI within 18 months that he is either:'”
® not a relevant person
e is tax compliant, in which case a certificate must be provided
e orhe wants to benefit from the disclosure facility
Depending on the individual's situation, various responses can be made. If he is not a relevant person
and has no UK tax liability, he can either send a written form which is confirmed by an “Appropriately
Qualified UK Advisor”, an original "Certificate of Tax Compliance"? or a written identification form
and waiver that allows the FI to send the notification to HMRC directly." The option to send an iden-
tification form and a waiver is provided to ensure an individual who is not relevant or tax compliant
does not have to pay any fees for advisors or notaries to demonstrate this fact."
^ Memorandum of Understanding, 2009, schedule 2.
75 Rettig, 2011, p. 3,7 & 8.
176 Memorandum of Understanding, 2009, schedule 3, no. 1.
7 Annex C
178 Memorandum of Understanding, 2009, schedule 3, no. 1, letter c.
1? Annex D
50 HMRC, FAQ, March 2013, sec. 1.16 & 2.2.
5! HMRC, FAQ, March 2013. Sec. 1.18.
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