Swiss/UK Tax Cooperation Agreement
This agreement with the Swiss Federal Tax Authority came into force on 1st January 2013 and it ensures UK residents with undisclosed funds in Swiss bank accounts pay tax on those funds in the UK.
For UK individuals that hold a Swiss bank account or investment you have 2 options:
1. Do nothing
If you do nothing, a one-off payment will be deducted from your Swiss assets. The payment is calculated in accordance with an agreed formula and will be between 21% - 41% of the balance. See the HMRC website for further details hmrc.gov.uk/taxtreaties/ukswiss.htm
If you continue to do nothing, future income and gains arising on those assets will be subject to a withholding tax. Future charges will include 48% withholding tax on investment income, 40% on dividend income and 27% on gains received in the account going forward.
2. Choosing to authorise disclosure
To avoid the one off payment and future withholding tax you can authorise disclosure of your Swiss assets to the Swiss authorities for onward transmission to HMRC. If you take this option, you will not be subject to a one-off payment or withholding tax. However it might prove to be more benificial to do this through the liechtenstein disclosure facility.
Assistance for the Swiss/UK Tax Cooperation Agreement
As outlined above, various options are open to you under this Agreement. Taylorcocks’ tax experts can guide you through the choices and advise which is best for you.