LDF and Swiss-UK Tax Agreement
Preliminary Remarks
Research Question
The aim of the project is to analyse the Liechtenstein Disclosure Facility and the Swiss-UK tax agree-
ment and illustrate their application using cases. The thesis answers the following main research ques-
tion:
What are the tax implications of Liechtenstein's disclosure approach and Switzerland's
withholding approach to the United Kingdom?
In order to answer this research question, several sub-questions are addressed:
1.
What are the meanings and definitions of “Tax Disclosure”, “Withholding Tax”, and
“Tax Cooperation”? The terms are explained in the context of the agreements reviewed in
the thesis.
What is likely to be the most important future feature of tax compliancy for individuals
and tax compliant clients for financial markets? This is necessary to understand the recent
developments and the reason for the conclusion of the agreements made by Liechtenstein
and Switzerland with foreign countries. A historic overview will be given and the role of
Liechtenstein, Switzerland and the United Kingdom in this development will be analysed.
What are the LDF and the Swiss-UK tax agreement? The project will give a comprehen-
sive insight into both agreements and explain the legal setting. This will make the struc-
ture and the theoretical application of the agreements clear.
How are the agreements used to calculate the tax burden of individuals using them? Cases
will be used to illustrate the application of the agreements and analyse the tax effects. For
example, one case concerns a UK citizen with GBP 3 million in a Swiss bank account
undisclosed to the UK tax authority. After evaluating the cases, each should return a
monetary tax liability, which will then be analysed. The cases are examples to support the
analyses and do not represent a comprehensive financial tax calculation.
Which agreement is most beneficial in these cases? The case figures are compared in or-
der to support the analysis of the two approaches. This comparison also includes an anal-
ysis of problem areas such as the privacy and sustainability of the agreements.
