LDF and Swiss-UK Tax Agreement
porated or managed outside the UK; c) interest in a non-UK immovable property; d) interest in a non-
UK estate or; e) interest in a non-UK insurance policy issued or administrated outside the UK?"
The Declaration clarifies the use of the composite rate and states that this option is only available from
1 April 1999 until 4 April 2009. Afterwards, normal taxation rates will apply. However, HMRC im-
plemented an additional composite rate in the Third Joint Declaration.**
A penalty of 10% applies for the years from 1 April 1999 until 4 April 2009. In most cases, the pen-
alty will be 20% for the years 2009 and 2010." For subsequent years, the penalty is based on UK
legislation. However, if the relevant person cooperates and makes a full and complete disclosure, the
minimum level will be applied.” The minimum level is 20% for “unprompted disclosure of deliberate
behaviour" and 30% for “unprompted disclosure of deliberate and concealed behaviour” > Penalties
can increase if the account was opened via a UK branch, the relevant person has already been contact-
ed due to the New Disclosure Facility or the relevant person was already investigated and convicted
for tax fraud and the Liechtenstein assets have been knowingly undisclosed. *’ In the latter case, taxes
will be 30% for the years up to 2010.” In case of innocent error, no penalty will apply.” If an indi-
vidual with Liechtenstein assets fails to use the LDF or transfer the assets to another jurisdiction he
will face penalties of over 100% of the tax due.“
The clarification of the relevant property is based on the TIEA and will be analysed further in section
2.3.7. This clarification of penalties for the years after 2009 is an important matter and ensures plan-
ning reliability for future LDF participants.
2.3.5.3 Guidance on Liechtenstein Entities
The agreed guidance on Liechtenstein entities is included in appendix A of the Declaration. An “Ak-
tiengesellschaft, GmbH, Societas Europaea or an Anstalt mit Gründerrechten” will be recognised,
characterised and treated as a company. A “Kommanditgesellschaft or Kollektivgesellschaft “will be
#! Second Joint Declaration, 2010, p. 3 & 4.
252 Second Joint Declaration, 2010, p. 4.
253 Second Joint Declaration, 2010, p. 4.
4 HMRC, LDF FAQ, March 2013, sec. 6.2.
55 HMRC, LDF FAQ, March 2013, sec. 6.8.
55 HMRC, LDF FAQ, March 2013, sec 6.9.
"HMRC, LDF FAQ, March 2013, sec 6.1.
8 HMRC, LDF FAQ, March 2013, sec 6.7.
9 HMRC, LDF FAQ, March 2013, sec 6.1.
260 Register & Fernandopulle, 2009, p. 23.
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