Liechtenstein Disclosure Facility To Close In December

The UK and Liechtenstein have published a Joint Declaration that provides for the early closure of the Liechtenstein Disclosure Facility.

The UK’s March 2015 Budget brought forward the final date for registration to participate in the LDF from April 2016 to December 31, 2015. The Joint Declaration, signed this month, makes the necessary amendments to the bilateral Memorandum of Understanding (MoU) on cooperation in tax matters. After that date, Liechtenstein financial institutions will continue to follow the review and termination of service procedures set out in the MoU until December 31, 2017. The requirement to issue a Confirmation of Relevance (COR) will expire on September 30, 2017. The final audit of the COR procedure will take place between January 1 December 31, 2017.

The UK and Liechtenstein have agreed that no request shall be made under their Tax Information Exchange Agreement (TIEA) during the period after an individual applies to register to participate in the LDF and before they have been notified by HMRC that either their application has been refused, their disclosure has been accepted, or the terms of the LDF no longer apply to them.

Since 2009, more than 6,400 people and companies have registered to participate in the LDF. More than 5,900 disclosures have been received and the LDF has raised more than GBP1.15bn from settled cases and payments on account.

Tessa Lorimer, special counsel at law firm Withers, commented: “The UK is closing the LDF as access to coercive new criminal powers will shortly supersede the need for it. Although a new disclosure facility will be introduced in 2016, I am certain that its conditions will be much stricter than the LDF’s and would urge anyone with undisclosed offshore assets to make use of the LDF before it closes. Allowing time to go through the disclosure process means that people should register as soon as possible.”

“As HMRC’s information gathering powers continue to increase – with the introduction of Common Reporting Standards on the horizon – taxpayers must be aware that they will not be able to hide undisclosed assets.”