LDF and Swiss-UK Tax Agreement
are liable to taxation in the UK. FIs have the duty to notify any identified persons they have reason to
believe or know may have a tax liability in the UK.'* The notified persons have to demonstrate that
they are either not liable to pay tax in the UK or are tax compliant. If the FI receives an unsatisfactory
answer, the relevant services to that person are to be ceased."*® On the other hand, if the notified person
does not provide one of the two answers mentioned above, HMRC has to offer a five-year special
disclosure facility (LDF) to every person that is affected by the so called Taxpayer Assistance and
Compliance Programme.
The disclosure facility has limited penalty, a shorter tax assessment period and offers a composite rate.
It is available for all persons with existing or new structures or bank accounts in Liechtenstein. Ex-
cluded are persons under investigation or contacted by HMRC or with an offshore bank account
through a UK branch (for this account).
Furthermore, the parties agree to provide FIs with written guidance.'? The aim of the MoU is to re-
duce the number (UK) relevant persons with tax liability in the UK using the laws of Liechtenstein to
hide their tax liabilities to zero by the end of the TACP.'?
Simultaneously, the contracting parties conclude a Tax Information Exchange Agreement (TIEA)
which is seen as adjunct to the MoU. The TIEA permits the UK and Liechtenstein to each make a
special request for tax information from the other. The parties began substantive negotiations on a
double tax agreement one year after the underwriting of the MoU.'! Crucially, the MoU (and TIEA)
eliminates restrictions to market access between the UK and Liechtenstein.'? Although Liechtenstein
is a member of the European Economic Area, free market access is not always guaranteed.'?
The preamble of the MoU forms no part of the terms of the agreement but, as a statement, it may guide
as a purposive interpretation.
145 Memorandum of Understanding, 2009, preamble, letter a & b.
146 Memorandum of Understanding, 2009, preamble, letter c.
147 Memorandum of Understanding, 2009, preamble, letter d.
148 Memorandum of Understanding, 2009, preamble, letter e.
^? Memorandum of Understanding, 2009, preamble, letter f.
130 Memorandum of Understanding, 2009, preamble, letter g.
5! Memorandum of Understanding, 2009, preamble, letter i & j.
152 Memorandum of Understanding, 2009, preamble, letter m.
133 Petring & Hônighaus, 2011, p. 15.
13 Memorandum of Understanding, 2009, part 1, no. 3.
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