It is announced that the agreement with Switzerland will be coming into force on 1 January 2013. Things will therefore be getting a bit tense for anybody who has funds in Switzerland which should have been disclosed to HMRC.
HMRC are urging everybody to come clean and their guidance note on the subject is engagingly simple : if you do nothing, on 31 May 2013 a one off payment (anything between 21% and 41%) will be taken from your Swiss assets. No pressure then. It does not end there, because future income and gains will be subject to a swingeing withholding tax each year.
Those who make a full disclosure of their income and gains to HMRC will not be affected at all.
Foreign domiciled individuals resident in the UK may only be liable to UK tax on their Swiss income and gains if they are remitted to the UK and a more limited disclosure applies to them.
In addition UK resident beneficiaries of discretionary trusts or foundations are excluded from the definition of a “relevant person”. It is interesting that although the LDF made specific provision to bring the settlor within the scope of the disclosure requirement by deeming the settlor to be the beneficial owner, there is no similar provision in the Swiss agreement.
I imagine that anybody who has hidden funds in Switzerland will find it increasingly difficult to obtain professional assistance having regard to the obligations on UK professional advisers in this area, except of course to accept instructions to make a full disclosure to HMRC.
Where Swiss funds have not been properly disclosed to HMRC, there will be penalties of course but a disclosure now will be more sympathetically considered by HMRC. If you can get inside the LDF, that could prove to be the best option as it limits the penalty to 10% for the 10 years up to 2009 and 20% thereafter.