Posted by Nick Day on 24 Apr 2012
UK: Swiss Tax Changes
Germany and Switzerland have recently announced an increase to the rate of tax chargeable on undeclared accounts under their double tax agreement, and this change is likely to impact on UK based holders of Swiss bank accounts too.
This is because a clause in the UK-Swiss treaty allows for the UK to ask for changes to the deal in order to reflect any renegotiation of the German-Swiss arrangement.
Since the current UK-Swiss agreement has been regularly criticised it seems likely that the government will use this opportunity to increase the level of tax charged under the arrangement.
If changes are made, the new rates for one-off charges on undeclared accounts are likely to be 21-41% rather than the current 19-34%.
This potential change could make holding a Swiss account far less desirable, especially in light of other proposed changes to the inheritance tax treatment of such funds.
These changes mean that anyone with an undeclared offshore assets may benefit from considering making use of the UK-Liechtenstein agreement, which offers far more favourable terms.
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