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UK and Swiss info exchange begins

Many offshore assets scrutinised as part of tax evasion crackdown

22 August 2013

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The monthly exchange of tax information between the UK and Switzerland took effect from 31 July 2013, as the government continues its efforts to clamp down on tax evasion, tax avoidance and secrecy.

Under the scheme, income and gains from investments held by UK taxpayers in Swiss banks will be subject to a withholding tax, with the rates comparable to the UK top rate of tax and payment satisfying UK liabilities.

John Cassidy, partner at accountancy firm Crowe Clark Whitehill, said some account holders could be in for a surprise.

"Many Swiss bank account holders will now face scrutiny from the tax authorities regarding their offshore assets. Even account holders that authorised disclosure of their account details can still expect questioning from HMRC on their account, the source of the funds and whether each item has been taxed correctly – checking, for example, whether offshore income gains have been incorrectly taxed as capital gains," he said.

"Some account holders may not have authorised disclosure of their details but could still be in for a surprise. Many account holders who did not respond to letters from the bank will have automatically defaulted into paying a substantial levy instead of disclosure of the account.

"However, if not enough funds were in the account to pay that levy, the account and the holder's details are then automatically disclosed to HMRC. No doubt investigations will follow."

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Tax & Wealth structuring