Budget Explained: Tax Agreement between the UK and Switzerland

accawebmaster —  23 March 2012 — Leave a comment

By ACCA’s budget team

The Government will legislate in Finance Bill 2012 to give effect to the agreement between the UK and Switzerland on cooperation in tax matters that was signed on 6 October 2011, as amended by a Protocol signed on 20 March 2012. There are four main effects as follows:

  1. It provides for a one-off levy to be applied to accounts in Switzerland held directly or indirectly by individuals who are resident in the UK unless the individual authorises disclosure of those accounts. Compliant individuals should authorise disclosure and so avoid the levy.
  2. It applies a withholding tax to income and gains arising on those Swiss accounts from 1 January 2013. Individuals may authorise disclosure and avoid the withholding tax. Where instead a retention is made under the 2004 agreement between the EU and Switzerland about the taxation of savings income a separate tax finality payment is made which together with the retention achieves an outcome equivalent to the withholding under the October Agreement.
  3. There is provision for a levy on the assets of an individual who dies on or after 1 January 2013, which similarly may be avoided by disclosure.
  4. It provides for enhanced exchange of information between the tax authorities of the two countries.

The measure also provides that the fact that arrangements with a territory contain significant protection for UK tax revenue may be taken into account in classifying a territory for the purposes of the offshore penalty legislation.

Remember, you can see ACCA’s budget blog from yesterday, here


No Comments

Be the first to start the conversation!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s