How to regularise your UK tax affairs with HMRC thanks to The Liechtenstein Disclosure Facility
The Liechtenstein Disclosure Facility (“LDF”) is a unique voluntary disclosure facility offered by HMRC which gives taxpayers the opportunity of a bespoke disclosure facility to regularise their UK tax affairs. It has the secondary purpose of protecting the international reputation of Liechtenstein and its banks and fiduciary companies.
The LDF is available until 5 April 2016 and offers UK taxpayers the opportunity to correct any errors in their UK tax affairs without fear of criminal prosecution and in a way that could lead to real savings in the amount of tax and penalties payable than would be secured in normal negotiations with HMRC. The main points of the LDF are:
- Undeclared tax liabilities for periods prior to 1 April 1999 are ignored
- Immunity from criminal prosecution for tax offences and no publicity as a “tax defaulter” provided a full disclosure is made and the underlying funds were not obtained from criminal activity
- Penalties fixed at 10% for all tax years up to and including 5 April 2009
- Composite tax rate of 40% available overrides all other forms of taxation payable
- Fast track approach with disclosure 10 months from registration, or 7 months if composite rate used, together with payment of under-declared tax
The potential benefits under the LDF differ depending on whether you already had a financial presence in Liechtenstein when the LDF was launched or whether that financial presence has since been obtained even if only in anticipation of using the LDF.
The LDF is presently the best opportunity available to UK taxpayers to correct errors in their UK tax affairs. Our direct experience of the LDF will allow you to put your tax affairs in proper order.