UK Tax Authority Issued Final Warning for Swiss Account HoldersUK Tax Authority Issued Final Warning for Swiss Account Holders
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UK Tax Authority Issued Final Warning for Swiss Account HoldersUK Tax Authority Issued Final Warning for Swiss Account Holders

The British tax agency has issued a warning to Swiss bank account holders stating that they have one final chance to pay any tax due, otherwise they will face investigation.

Currently the tax authority is also sending letters to the account holders to warn them that they could face penalties, which could reach up to 150% of the taxes owed. This is the third reminder sent to UK taxpayers having accounts in Swiss banks.

The tax agreement settling the issue of undeclared bank accounts between the UK and Switzerland will enter into force on January 01, 2013. According to the treaty, accounts held by individual UK taxpayers in Switzerland will be subject to an anonymous one-off tax payment in 2013, providing that the account in question was open on December 31, 2010 and remains open on May 31, 2013. This payment will cover income tax, capital gains tax, inheritance tax and value-added tax liabilities in relation to the funds in the account. The tax will not be applied if the account holder instructs the bank to disclose details of the account to the UK tax authority. In case of disclosure, the UK tax authority will charge unpaid taxes with the relevant interest and penalties.

The tax treaty will introduce a new withholding tax on income and gains derived from investments held by individual UK taxpayers in Swiss banks from January 01. The withholding tax will be charged at a rate between 19% and 34%, dependent on the assets in question, the duration of the client-bank relationship and the initial and final amount of capital held in the account. This tax will not apply in case of disclosure.

It is expected that the Swiss deal will generate an additional GBP 5 bln in tax revenue for the UK.

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