Liechtenstein Disclosure Facility to Close Early, HMRC

The Liechtenstein Disclosure Facility (LDF) will close earlier than planned at the end of 2015, rather than April 2016, the UK Government has confirmed in the latest Budget.

The LDF gives individuals based in the UK an option to declare the income and gains from bank accounts and assets held offshore. An agreement was struck between the Liechtenstein and UK governments in September 2009 allowing individuals to bring their offshore tax affairs up to date.

The voluntary disclosure facility offered the benefits of limited penalties and immunity from prosecution, rather than facing a full HMRC tax investigation, which in some extreme cases, could stretch back 20 years.

More information about the Liechtenstein Disclosure Facility can be found here.

It has been announced that the Liechtenstein Disclosure Facility will now close at the end of 2015, making way for what has been described as a ‘last chance’ voluntary disclosure facility.

The new disclosure facility will become available between 2016 and 2017 prior to the introduction of the new Common Reporting Standard, which will see information about individuals’ tax liabilities held offshore shared freely between the relevant authorities in a wide range of jurisdictions. The information will include bank account numbers, addresses, account balances and names of account holders which will assist HMRC in identifying those to target in its continued clampdown on tax evasion.

It has been reported that the new disclosure facility could have minimum penalties of 30%, plus the amount of tax owed with interest on top. Those who fall on HMRC’s radar once the LDF does cease will also lose immunity from criminal prosecution.

It appears as though HMRC is stepping up efforts further in its clampdown on tax evasion with this latest announcement. For those with bank accounts held offshore there is still time to come forward to make a voluntary disclosure to HMRC. LDF has long been seen as one of the most favourable disclosure facilities.

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