The LDF Or Liechtenstein Disclosure Facility Is Due To Close On 31 December 2015
London, England -- (SBWIRE) -- 12/09/2015 -- The Liechtenstein disclosure facility is to close earlier than expected on 31 December 2015. This means that UK tax payers who have overseas financial assets and have a tax liability on those assets have just over a month to take advantage of the generous settlement terms offered by the Liechtenstein disclosure agreement.
The Liechtenstein disclosure facility is a product of a tax agreement between the principality of Liechtenstein and the government of the United Kingdom. It gives British citizens the opportunity to settle their outstanding tax liabilities on financial assets held in Liechtenstein for which they had not previously declared to come clean on terms that are rather favorable. Tax penalties under the Liechtenstein tax agreement starts at about 10% of the undeclared tax. This is considerably lower than the normal tax penalties on undeclared overseas income. The lower rate of penalties on undeclared tax is only applicable if the tax payer comes clean by themselves with regards overseas assets previously not declared.
After the closure of Liechtenstein disclosure facility, tax penalties on undeclared taxable will start at 20% and there will be no guarantee that H M Revenue & Customs will not prosecute for failure to disclose income chargeable to tax.
It is believed that the Liechtenstein disclosure facility has so far generated up to 1 billion pounds extra tax for the treasury. It was originally intended to run until the year 2016. When the Liechtenstein disclosure facility closes on 31 December 2015, it will be replaced by a more general disclose facility that will apply to most countries around the world.
Liechtenstein disclosure facility was originally intended to be used by the Citizens of the United Kingdom to declare financial assets that they help in the principality of Liechtenstein. However it ended up being used as a way for some United Kingdom taxpayers to declare unpaid tax due on assets that they held in the United Kingdom. According to one commentator almost one in five of those who used the Liechtenstein disclosure facility to declare unpaid tax did not hold any overseas assets. It was instead used to report undeclared tax on UK assets
Most accountants believe that closing the Liechtenstein disclosure facility is the right thing to do because there was no justification to favor those who put their money in one particular jurisdiction over the others. The accountants at Alexander Ene in particular are of the opinion that a much fairer and equitable situation will be to offer the same treatment to every one irrespective of where the undeclared financial assets where located. According to a senior member of the firm, it will be a wise idea for anyone who has any undeclared assets to use this opportunity to come clean before it closes.
For more information:
Contact: Alexander Ene
Address: 336A Regents Park Road, London, N3 2LN
Telephone: 020 8343 2626