The Liechtenstein Disclosure Facility (LDF) is a disclosure facility targeted at those individuals currently holding a bank account or asset (relevant property) in Liechtenstein, to enable them to make a disclosure to HMRC. Smith & Williamson has now successfully completed over 200 LDF disclosures. Here are some reasons why you cannot afford to miss out on the LDF.
- The beneficial terms of the LDF only apply for the years 1999 to 2009. This does away with the need to put right any matters prior to 1999.
- The unique 'composite rate' tax calculation could lead to beneficial tax savings especially in inheritance tax (IHT) cases but it must be considered carefully before that approach is adopted.
- The penalty within the LDF beneficial period 1999 to 2009 inclusive is 10% of the additional tax, but for years 2009/10 onwards it is 20%, still significantly lower than the 30%-70% which could be charged under an HMRC enquiry.
- Participants in the LDF will not be 'named and shamed' and will receive five years of reduced scrutiny in respect of their tax returns. Importantly they would not be exposed to the threat of a criminal tax investigation.
- The LDF allows contact with a specific HMRC officer who will ensure that your affairs are dealt with promptly, including all technical matters being agreed (e.g. residence and domicile if appropriate). The disclosure will be dealt with within 12 months of registration and difficult matters will be resolved reasonably. You will not get this level of service anywhere else in HMRC.
- If your offshore disclosure involves 'mixed capital and income funds' HMRC will agree the capital/revenue split to apply for future remittances and tax return disclosures.
- HMRC will positively consider that trust or trust-like structures are still in the hands of the settlor, thus avoiding complex and often sizeable IHT tax liabilities arising.
- Even if you are currently under enquiry by HMRC, as long as that enquiry is not a criminal or serious tax fraud enquiry, you can participate in the LDF.
- Acquiring 'relevant property' in Liechtenstein can be done very quickly, efficiently and at varying levels of financial investment dependent upon the undisclosed funds.
- Extensive information exchange agreements, stolen bank data and ongoing client data collection by tax authorities mean that undisclosed offshore funds are likely to be discovered – the cost will be a criminal tax investigation or a substantial tax settlement including a 45%-200% penalty.
- Following your disclosure you will be able to access your funds freely and put your financial affairs in the best possible order for inheritance, management or enjoyment purposes without fear of the taxman.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.