LDF and Swiss-UK Tax Agreement
If a relevant person does not have enough assets in the bank account to pay the one-off deduction on
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the 31* April 2012, the Swiss paying agent has to offer an eight week deadline. If the amount is still
too low after the deadline, the agent has to disclose the relevant person according to the voluntary
disclosure procedure?
In the case of a Swiss paying agent failing to identify a relevant person, this relevant person has the
option of applying for the agreement before a deadline which has not yet been set. The wording
implies that the UK authority has the opportunity to refuse a later registration. This is true if the failing
was caused by the person, but if the Swiss paying agent failed to identify the person this would be an
execution error, and the person must be allowed to enter into the agreement. Nevertheless, the agent
has to raise an interest for the time between 31* April 2012 and the payment date." Whether the inter-
est must be paid in the event of an execution error is questionable.
If the amount for the one-off payment is too low (in error), the agent can levy the missing amount,
including interest, for HMRC.^? The payment in lieu is still valid if the relevant person checked the
certificate with reasonable care.??
If the payment amount is too high or wrongly levied, HMRC pays
back the amount in due course (plus interest, less expenses), provided the relevant person is able to
show evidence.
The one-off payment satisfies past income tax, value-added tax, and gift tax. Furthermore, the pay-
ment carries an exemption from punishment for tax evasion. An exemption from punishment is not
given if the assets were gained through a criminal act?
The one-off payment is mostly very simple and requires little effort from the relevant person. Most of
the process is completed by banks, which require an IT-system capable of handling the calculation and
payments. Therefore, very little is expected in the way of advisory costs. However, one major problem
38 CH-UK Tax Agreement, 2011, art. 13, para. 1.
34: CH-UK Tax Agreement, 2011, art. 13, para. 3.
55 CH-UK Tax Agreement, 2011, art. 14, para. 1.
35$ Degen, 2012, p. 31.
57 CH-UK Tax Agreement, 2011, art. 14, para. 2.
8 Degen, 2012, p. 32.
5:9 CH-UK Tax Agreement, 2011, art. 15, para. 1.
99? CH-UK Tax Agreement, 2011, art. 15, para. 2.
?! CH-UK Tax Agreement, 2011, art. 15, para. 3.
9? Urtz, 2012 (2), p. 61 & 62.
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