LDF and Swiss-UK Tax Agreement
mal request under an information exchange agreement."* But it is important to note that confidentiality
and secrecy against third parties is still in place and will not be annulled by the LDF. On the other
hand, the Swiss-UK tax agreement guarantees confidentiality and secrecy against third parties and
against authorities such as HMRC.^? AII assets in Switzerland are unknown to HMRC and the taxpay-
er stays anonymous in the future.“
In terms of compliancy and privacy, the Swiss solution is clearly better. Although the LDF protects
from “naming and shaming”, HMRC will be informed about tax evaders and, for certain exposed per-
sons such as politicians or entertainment stars, anonymity might be more important than minimizing
the final tax load.
4.6 Flexibility
Neither agreement is particularly flexible. The agreements were developed and negotiated for the
“simple” reason of regularising the past and ensuring a tax compliant future. However, in some parts,
the LDF seems more flexible in terms of geographical application, time limits and substantive content.
The LDF allows foreign assets to be regularised and profit to be made from the LDF, even without a
prior connection to Liechtenstein. Additionally, only a meaningful part of the relevant assets toned to
be transferred to Liechtenstein to take advantage of it. The LDF enables the regularisation of all assets,
including foreign assets, whereas the Swiss-UK tax agreement is limited to Swiss bankable assets
which are already located in Switzerland.*' On the other hand, the LDF only allows a blanket disclo-
sure to regularise the tax liabilities, whereas individuals using the Swiss-UK tax agreement are free to
decide between a one-off deduction or a voluntary disclosure for the past and the withholding tax or
the voluntary disclosure for the future.
4.7 Sustainability of the Agreements
The Swiss-UK tax agreement is a long-term solution with no termination date, whereas the LDF ex-
pires in April 2016, and accounts and entities of non-compliant clients have to be closed by then at the
latest.’ Both agreements allow for existing clients to be kept in Liechtenstein and Switzerland respec-
tively.^? However, after the first year, when the one-off deduction is paid, Swiss Banks will have some
advantages for retaining clients due to preserved anonymity. Clients in Liechtenstein have fully dis-
473 HMRC, LDF FAQ, March 2013, sec. 1.20.
^? Goekmen, 2012, p. 53.
^3? Schaad, 2012, p. 71.
^! Roth & Thiede, 2013, p. 620.
^3 Schaad, 2012, p. 71.
^3 Hosp & Langer, 2011 (3), p. 242.
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