LDF and Swiss-UK Tax Agreement 
Table 14 Summary of the cases 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Voluntary Swiss-UK 
disclosure LDF LDF CRO tax agreement 
Case 1 
Tax burden GBP 71,669 GBP 55,484 GBP 65,088 GBP 100,418 
Portion of assets 15% 11.6% 13.6% 21.0% 
Best option Yes 
Case 2 
Tax burden GBP 1,855,668 GBP 415,299 GBP 327,102 GBP 657,002 
Portion of assets 64.1% 15% 11.496 21.096 
Best option Yes 
Case 3 
Tax burden GBP 13,395,534 GBP 5,967,120 GBP 5,297,724 GBP 11,402,066 
Portion of assets 277,596 12.296 10.996 23.4% 
Best option Yes 
  
  
  
  
  
Source: Case studies in chapter 2.4 and 3.5 
In case 1, the tax burden for the one-off deduction is higher than for voluntary disclosure. This is be- 
cause the minimum tax rate for the Swiss-UK tax agreement is 21%. If only income and capital gains 
are taxed the final burden is lower, even after penalties and late payment interest are calculated. How- 
ever, the tax burden from choosing the LDF is around 50% lower than for the Swiss-UK tax agree- 
ment. Thus, purely from the point of view of the tax burden, the LDF should be chosen. 
In case 2, inheritance tax and higher penalties result in the highest tax burden for voluntary disclosure, 
particularly because of the longer timeframe. The one-off deduction associated with the Swiss-UK tax 
agreement results in a tax rate of 21%. Standard LDF disclosure is lower still, at 15%, and applying 
the CRO reduces the tax rate to around 11.4%. To conclude, the tax burden associated with the LDF 
option is barely half that of the one-off deduction, and should be seriously considered by Mr Thomp- 
son and his lawyer. 
For case 3, voluntary disclosure is also the most costly solution for the same reasons as in case 2. 
Comparing the LDF and the one-off deduction produces similar results. Because of the strong provi- 
  
sion of the asset value in the formula for the Swiss-UK tax agreement, the tax rate is relatively high at 
23.4%. Since the LDF only considers interest and capital gains, the final tax burden — including penal- 
ties and late payment interest in the case of LDF with CRO — is only half that of the one-off deduction. 
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