LDF and Swiss-UK Tax Agreement
then forward the taxes to HMRC by March of the corresponding year.?' For persons making a volun-
tary disclosure the agent has to send the taxes within three months after the end of the tax year to the
Swiss tax authority, which then forwards the taxes within six months after the end of the tax year to
HMRC.?? The Swiss paying agents issue a certificate for the relevant person at the end of the tax year
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or when the relationship ends.” If a relevant person transfers assets from one agent to another, the
first agent has to provide the second agent with all required information.”
3.4.4.5 Death of a Relevant Person
The protocol signed on 6 March 2012 added a new article 32 that regulates the death of a relevant
person. If a relevant person dies, the Swiss paying agent must freeze the assets immediately. Succes-
sors are only allowed to take 40% of the assets. After the assets are frozen, the successors have three
options. They can wait for one year, after which the agent withholds 4096 of the assets and transfers it
immediately to the Swiss tax authority.* The second option is to allow the Swiss paying agent to dis-
close and to send information (ID of deceased person; customer number, name of successors and ac-
count balance) in writing to HMRC."* Third, if the successors can provide a certificate from a lawyer,
tax advisor or accountant that he is not domiciled or not domiciled for inheritance tax purposes, the
agent must stop the freezing."
If the assets in the bank account are too low to pay the withheld 40%, they receive an eight week dead-
line. If the amount is still too low, the agent must make a disclosure."* The agent must then issue a
certificate declaring that the inheritance tax issue has been handled.*”
Inheritance tax in the UK is set at 40% for every person except spouses.’ The same arrangement is
used in the agreement. The spouse is fully tax exempt and, therefore, taxed at 0%. Furthermore, there
is a nil-rate band up GBP 325,000 for the whole estate. In certain cases it might be beneficial to dis-
close Swiss assets in order to profit from this nil-rate band.
?! CH-UK Tax Agreement, 2011, art. 29 para. 3.
^? CH-UK Tax Agreement, 2011, art. 29 para. 4.
?3 CH-UK Tax Agreement, 2011, art. 30.
^^ CH-UK Tax Agreement, 2011, art. 31.
?5 CH-UK Tax Agreement, 2011, art. 32, para. 2.
#6 CH-UK Tax Agreement, 2011, art. 32, para.
#7 CH-UK Tax Agreement, 2011, art. 32, para.
#8 CH-UK Tax Agreement, 2011, art. 32, para.
?? CH-UK Tax Agreement, 2011, art. 32, para.
^? HMRC, 2013 (4).
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