Commentary

A6.1216 UK tax agreement with Switzerland

Administration and compliance

A6.1216 UK tax agreement with Switzerland

A6.1216 UK tax agreement with Switzerland

On 6 October 2011 the governments of Switzerland and the UK signed and published an agreement to co-operate on tax matters1, which was finalised after scrutiny by Parliament2 and ratification in Switzerland and came into force on 1 January 2013. This is not a disclosure facility, but it does give UK taxpayers an opportunity to bring their tax affairs up to date if they have not declared to HMRC income and gains arising on accounts in Switzerland.

The agreement provides for:

  1.  

    •     a one-off levy, in lieu of historic taxation liabilities, to be applied to financial assets in Switzerland beneficially owned by individuals resident in the UK, unless the individual authorises disclosure of those assets

  2.  

    •     a withholding tax to be applied to income and gains arising on those Swiss accounts from 1 January 2013, and

  3.  

    •     enhanced exchange of information between the tax authorities of the two countries

The agreement is supplemented by a Protocol, signed on 20 March 20123 which:

  1.  

    (a)     introduces a new inheritance tax levy on the death of a relevant person on or after 1 January 2013, unless their personal representatives authorise the Swiss bank to disclose the account details to the UK, and

  2.  

    (b)     clarifies that the withholding tax in (b) above does not apply where a relevant person has suffered withholding tax under the 2004 agreement between the EU and Switzerland on the taxation of savings income (the EU Savings Agreement (EUSA)). In these circumstances, an additional 13% 'tax

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