LDF and Swiss-UK Tax Agreement 
Additionally, he would have to pay taxes on income and gains since 1999 of approximately 40%. The 
penalty would be only 10%** for the years until 2009 and 20%*° afterwards. This adds up to a payable 
tax due of GBP 415,299 for a normal LDF disclosure. 
Finally, if Mr Thomson follows the LDF route he would be able to opt for the composite rate. In this 
case, the 10 year anniversary tax and the distribution to the beneficiary would be out of scope and the 
taxes due would come to GBP 327,102. 
This case shows that Mr Thomson would have to pay taxes of 11.4% of the asset value under the LDF 
compared to at least 64.8% of the asset value under an ordinary disclosure. 
2.4.4 Case 3 
Mr Baker is domiciled and residing in the UK. He opened a Swiss bank account in 1989 in order to 
transfer an agency fee of GBP 10 million without declaring it. Since then, he has used the account to 
divert overseas sales income. He is a self-employed trader and generates GBP 120,000 in undeclared 
income per year. Additionally, in 1995, he inherited GBP 4.5 million and a house in Spain from his 
father. He transferred the entirety of the GBP 4.5 million to the Swiss account and has received rental 
income from the house since 1996. The assets were never declared to HMRC. The bank account ac- 
cumulated income and gains of GBP 15,959,775 from 1992 to 1998, GBP 14,030,820 from 1999 until 
2009 and a further GBP 8,353,545 from 2010 until 2012. Mr Baker's lawyer informed his client about 
the possibilities of the LDF and recommended clearing the tax situation. Mr Baker agreed, a bank 
account in Liechtenstein was opened and a sufficient amount was transferred in order to receive the 
certificate of relevance. 
Table 8 Case 3 parameter 
  
  
  
  
  
  
Year Account balance | Interest and gains | Overseas sales income | Rental income 
1989 GBP 10,000,000 
1995 inheritance | GBP 17,371,966 | GBP 607,236 GBP 120,000 
1999 GBP 30,474,252 | GBP 3,954,555 GBP 120,000 GBP 36,000 
2009 GBP 40,394,517 | GBP 4,311,270 | GBP 120,000 GBP 36,000 
2010 GBP 43,782,078 | GBP 3,231,561 GBP 120,000 GBP 36,000 
  
  
  
  
  
  
  
  
18 Carrell, 2010, p. 41. 
?? Barry & Airey, 2012, p. 13. 
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