Most ultra-high net worth individuals and members of family businesses and offices are unlikely to be affected by the new tax agreement between the UK and Switzerland, which aims to tackle offshore tax evasion, despite reports to the contrary, according to a top London lawyer.
Mark Summers, a partner at law firm Speechly Bircham, told CampdenFB there has been a lot of misinformation about the impact of the agreement, particularly when it comes to registered non-domiciles.
“It looks like its not going to complicate things and add further bureaucracy for families who are compliant,” he said, but he added: “We need to see the details about how people who are already compliant can prove this.”
Under the terms of the new UK-Swiss agreement, which is expected to raise billions of pounds in unpaid taxes, a one-off deduction of between 19% and 34% on existing funds held by British taxpayers in Switzerland will be used to settle past tax liabilities. Those who have already paid their taxes will be unaffected.
The agreement, which is expected to be introduced in 2013, will preserve the anonymity of UK account holders – an important Swiss demand.
Wealthier families are usually compliant, even if they use tax avoidance methods, said Summers, so they are unlikely to be affected by the agreement. Registered non-domiciles should also not be impacted, he added.
However, Geoff Richards, chairman of Richards & Partner Consulting, reckons some may be tempted to move their assets to other areas, partly because of the future tax levies, which are "very high" under the proposals.
Summers and Phil Berwick, director at commercial law firm McGrigors, agree that there are now few “stable” areas in the world where it is possible to avoid tax.
“The days of relatively risk-free tax evasion are over,” said Berwick in a statement. “For those individuals that have undeclared assets it really is time for them to come in from the cold.”
According to Summers, some individuals who are not compliant may be better off making a disclosure under the Liechtenstein amnesty, rather than using the new agreement.
The Liechtenstein Disclosure Facility allows taxpayers to disclose their previous liabilities with immunity from prosecution and a 10% fixed-penalty rate.
Richards added: “When considering all of these proposals it appears that the Liechtenstein Disclosure Facility agreed between the principality and the UK Treasury is a more efficient and fair method of dealing with past undisclosed accounts.”
UK chancellor George Osborne announced the UK-Swiss agreement on 24 August. The move follows a similar deal between Germany and Switzerland earlier this month.