LDF and Swiss-UK Tax Agreement
Swiss paying agents have to inform relevant persons within 2 months that the Swiss-UK tax agree-
ment is in force." ^ The relevant person has the duty to inform the Swiss paying agent in writing which
95 If a new
option he wants to take and has to provide the required assets for the one-off deduction.
business relationship starts after this agreement is in force, the relevant person has to inform the pay-
ing agent if the assets were booked before 31/12/2012 to a Swiss account and whether such an account
still exists. If the assets were previously with another Swiss bank and this account no longer exists, the
relevant person has to authorise the new Swiss bank to collect all relevant information from the previ-
ous bank. The bank has to make a disclosure if the person does not reply, in writing, on time.” The
agreement only covers assets booked on bank accounts and deposits.* Precious metals, works of art,
antiques and real estate are not covered and can therefore not be regularised.*°“
Koblenzer criticises the change in how payment agents are treated. He constructs a case where a rele-
vant person who wishes to be paid out in cash, then changes the cash into gold or gold coins through a
bullion dealer in order to open a bank account with another Swiss bank and to deposit the gold there.^*?
However, Koblenzer does not take into account that the agreement has an anti-abuse rule under which
Swiss paying agents are not allowed to “knowingly manage or encourage the use of artificial arrange-
ments whose sole or main purpose is the avoidance of taxation of the relevant persons under the provi-
sions of this Agreement ??, Swiss paying agents who breach the rule are liable for the missed tax, with
the option of regress to the affected person?"
Furthermore, and independent from the agreement, the withdrawal of a large amount of cash must be
carefully scrutinised by banks. According to the due diligence law, banks must keep records of with-
drawals and the reasons for them. Furthermore, not every bank will pay out large amounts in cash
without the certainty of a paper trail.?? It might be possible to avoid paying any tax, but the person
runs the risk that the bank will inform the “Meldestelle fiir Geldwischerei”. Finally, if such a person is
detected later by the tax authority, he cannot expect to be treated leniently.
3€! CH-UK Tax Agreement, 2011, art. 6, para. 1.
365 CH-UK Tax Agreement, 2011, art. 7, para. 1&2.
366 CH-UK Tax Agreement, 2011, art. 8, para. 1, 2 & 6.
%7 Hosp & Langer, 2011 (2), p. 913.
368 Urtz, 2012, p. 61.
36 Koblenzer, 2012, p. 125.
¥0 CH-UK Tax Agreement, 2011, art. 33, para. 2.
7 Jirousek, 2012, p. 208.
?? Eidgenóssische Finanzmarktaufsicht, Verordnung der Eidgenössischen Finanzmarkaufsicht über die Verhin-
derung von Geldwäscherei und Terrorismusfinanzierung (GWV-FINMA), 2013, art. 13, 14 & 20.
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