UK Swiss Tax Agreement and the LDF. Andrew McKenna Partner

Transcription

1 UK Swiss Tax Agreement and the LDF Andrew McKenna Partner

2 Disclaimer This seminar is of a general nature and is not a substitute for professional advice. No responsibility can be accepted for the consequences of any action taken or refrained from as a result of what is said.

3 UK Swiss Agreement PAST At 31 May2013 From 1 January 2013 FUTURE 1. One off payment 2. Voluntary Reporting 3. Voluntary Disclosure/LDF Swiss assets only 1. Final withholding tax 2. Voluntary reporting Complex Formula 21-41% of Capital at 31/12/10 or 31/12/12 Withholding Rates: Interest & other income 48% CGT 27% Dividends 40%

4 LDF Until April 2016 Immunity from prosecution If meet requirements only block is - COP 9 enquiry - Criminal investigation & arrested or cautioned Bespoke service & contacts in HMRC Need! - Offshore 01/09/09 - Relevant property in Liechtenstein (20%) - Certificate of relevance Disclosure facility worldwide income & gains Period 06/04/99 05/04/09 beneficial - CRO (no IHT) - 10% penalty - finality

5 Issue to highlight Swiss Agreement Issue of cleared funds Withdrawals not cleared Expect 21-25% loss of capital balance on average High withholding rates in future Retain anonymity Ease of moving funds? New world FATCA, ESD, transparency

6 Issues to highlight - LDF Lose anonymity Transferring funds to Liechtenstein Clear all tax problems (Worldwide) = closure Beneficial period tax only once, no IHT, CRO Move funds freely Deal with domicile claims Discussion with anonymity Bespoke service agree matters in disclosure pre submission Can do even if under enquiry

7 Conclusions LDF or Swiss Value of anonymity (Swiss) Clearing the past fully (LDF) Flexibility (LDF) Being in control (LDF) Freedom of capital Reality Transparency Normal FATCA expanded do it for one do it for all HMRC Focus = High net worth s, offshore structures, increased offshore penalties = money Action better than inaction

8 HMRC Focus on Tax Evaders Why? Who? What? When? Roy Baldwin Partner

9 HMRC Focus on Tax Evaders Why? Non-payment 12% Failure to take reasonable care 9% Avoidance 14% Error 6% Legal interpretation 13%

10 HMRC focus on tax evaders Who? High Net Worth Individuals High risk sectors UK property owners Offshore bank account holders Offshore trusts

11 HMRC focus on tax evaders What? New technology Connect Private sector expertise Stronger sanctions Managing deliberate defaulters Increased criminal prosecutions Increased penalties for certain offshore jurisdictions Cross border agreements Swiss/UK agreement and Lichtenstein Disclosure Facility US/UK intergovernmental agreement UK dependencies and territories

12 HMRC focus on the tax evaders When? December 2012 Radio advertising Letters challenging offshore account holders HMRC offshore Centre of Excellence Draft finance bill January 2013 UK/Swiss Campaign on missing VAT returns Land Registry date review Review 2011/12 SA returns of affluent taxpayer February 2013 Credit reference agency data review 5 new task forces Add bank data to Connect systems

13 HMRC focus on the tax evaders March 2013 Property disposal campaign Publication of comprehensive strategy to tackle offshore tax evasion in spring 2013 April 2013 Increase investigations pursuing affluent tax evaders Add tax evasion hotline reports to Connect May 2013 Start work to identify offshore trusts hiding income and wealth Test data from Metropolitan Police to identify fake identities being used in fraud Identify and investigate offshore property ownership

14 HMRC Focus on Tax Evaders Why? Who? What? When? Andrew McKenna +44 (0) Partner +44 (0) Roy E Baldwin +44 (0) Partner +44 (0) roy.baldwin@smith.williamson.co.uk Smith & Williamson LLP Regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities. A member of Nexia International The word partner is used to refer to a member of Smith & Williamson LLP

15 February 14 th 2013 Key Tax Developments: Custody Taxes, FATCA and Financial Transaction Taxes Mariano Giralt Head of EMEA Tax Services

16 Andrew McKenna Partner UK Swiss Tax Agreement and the LDF

17 Disclaimer This seminar is of a general nature and is not a substitute for professional advice. No responsibility can be accepted for the consequences of any action taken or refrained from as a result of what is said.

18 UK Swiss Agreement PAS T At 31 May2013 From 1 January 2013 FUTUR E 1. One off payment 2. Voluntary Reporting 3. Voluntary Complex Disclosure/LDF Formula 21-41% of Capital at 31/12/10 or Swiss assets only 1. Final withholding tax 2. Voluntary reporting Withholding Rates: Interest & other income 48% CGT 27% Dividends 40%

19 LDF Until April 2016 Immunity from prosecution If meet requirements only block is - COP 9 enquiry - Criminal investigation & arrested or cautioned Bespoke service & contacts in HMRC Need! - Offshore 01/09/09 - Relevant property in Liechtenstein (20%) - Certificate of relevance Disclosure facility worldwide income & gains Period 06/04/99 05/04/09 beneficial - CRO (no IHT) - 10% penalty - finality

20 Issue to highlight Swiss Agreement Issue of cleared funds Withdrawals not cleared Expect 21-25% loss of capital balance on average High withholding rates in future Retain anonymity Ease of moving funds? New world FATCA, ESD, transparency

21 Issues to highlight - LDF Lose anonymity Transferring funds to Liechtenstein Clear all tax problems (Worldwide) = closure Beneficial period tax only once, no IHT, CRO Move funds freely Deal with domicile claims Discussion with anonymity Bespoke service agree matters in disclosure pre submission Can do even if under enquiry

22 Conclusions LDF or Swiss Value of anonymity (Swiss) Clearing the past fully (LDF) Flexibility (LDF) Being in control (LDF) Freedom of capital Reality Transparency Normal FATCA expanded do it for one do it for all HMRC Focus = High net worth s, offshore structures, increased offshore penalties = money Action better than inaction

23 Roy Baldwin Partner HMRC Focus on Tax Evaders Why? Who? What? When?

24 HMRC Focus on Tax Evaders Why? Non-payment 12% Failure to take reasonable care 9% Avoidance 14% Error 6% Legal interpretation 13%

25 HMRC focus on tax evaders Who? High Net Worth Individuals High risk sectors UK property owners Offshore bank account holders Offshore trusts

26 HMRC focus on tax evaders What? New technology Connect Private sector expertise Stronger sanctions Managing deliberate defaulters Increased criminal prosecutions Increased penalties for certain offshore jurisdictions Cross border agreements Swiss/UK agreement and Lichtenstein Disclosure Facility US/UK intergovernmental agreement

27 HMRC focus on the tax evaders When? December 2012 Radio advertising Letters challenging offshore account holders HMRC offshore Centre of Excellence Draft finance bill January 2013 UK/Swiss Campaign on missing VAT returns Land Registry date review Review 2011/12 SA returns of affluent taxpayer February 2013 Credit reference agency data review 5 new task forces Add bank data to Connect systems

28 HMRC focus on the tax evaders March 2013 Property disposal campaign Publication of comprehensive strategy to tackle offshore tax evasion in spring 2013 April 2013 Increase investigations pursuing affluent tax evaders Add tax evasion hotline reports to Connect May 2013 Start work to identify offshore trusts hiding income and wealth Test data from Metropolitan Police to identify fake identities being used in fraud Identify and investigate offshore property ownership

29 HMRC Focus on Tax Evaders Why? Who? What? When? Andrew McKenna +44 (0) Partner +44 (0) Roy E Baldwin +44 (0) Partner +44 (0) roy.baldwin@smith.williamson.co.uk Smith & Williamson LLP Regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities. A member of Nexia International The word partner is used to refer to a member of Smith & Williamson LLP

30 The State of the Global Economy financial crisis Euro zone tensions sovereign debt crisis economic recession the global outcome is grim lower growth in the US, Europe and Asia too financial stress is holding back growth fiscal deficits uncertainty in financial markets Fiscal cliff Banking crisis unsustainable public debts and deficits 30

31 and How Tax Plays its Part 1. More & New Taxes 2. More & New Taxes to the Financial Services Industry 3. More Tax Compliance and Tax Due Diligence 4. More exchange of information between countries 31

32 Custody tax developments 1. Double tax treaties access: On boarding and Tax documentation New documents, more scrutiny, more complexity Periodic discussions with Tax Authorities and Industry Associations OECD TRACE program 2. European Court of Justice Tax claims: Based on EU Treaty Focus Bank, Denkavit, Santander case, etc Cost benefit analysis 32

33 FATCA and the Inter Governmental Agreements 1. FATCA Avoid tax evasion Identification and reporting of US accounts investing Financial Institutions outside the US 30% Withholding Tax on all US investments for those Non Participating Financial Institutions 2. Inter Governmental Agreements Challenge: Data privacy laws Report to the local Tax authorities No withholding tax 3. EU and OECD 33

34 Financial Transactions Taxes 1. The EU wide FTT The proposed EU FTT Directive : Proposal in September 2011 to introduce a EU FTT within the 27 EU countries by January 1st FAIL The alternative EU FTT process Enhance Cooperation Process 11 countries (including Germany, France, Italy and Spain) will be covered by the FTT tax 2. Local FTT The French FTT: Effective since August 2012 The Italian FTT: Effective from March 2013 Other local FTTs: Portugal, Spain, Hungary, etc: 2013? 2014? 34

35 and How Tax plays its Part (in Financial Services) FATCA & IGAs EUSD Investor Tax Reporting Trustee Tax Reporting ECJ Tax Claims Standard Custody Tax relief Tax Tax Documentation Transfer Pricing Capital Gains Tax Tax Transparent Vehicles Financial Transactions Taxes Thin Cap rules Tax compliance 35

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