 The Liechtenstein route to significant tax savings is still open
Come clean on your offshore accounts using the LDF
06 January 2010: The deadline for registering an intention to disclose unpaid tax under the New Disclosure Opportunity (NDO) passed on 4 January. However, people can still come forward using the Liechtenstein Disclosure Facility (LDF). John Cassidy, Tax Investigations Partner at PKF Accountants & business advisers, suggests it could be significantly cheaper to come forward now under the LDF.
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 | John explains, “Individuals registered to use the NDO will have to come clean about un-declared income over the last 20 years. However, if the LDF route is used it is a much shorter period of around 10 years. Because the difference in the number of years involved is so stark, the tax – and interest - saved can be significant.”
John adds, “Unlike the NDO it is still possible to register for the LDF. If you have already registered for the NDO it is possible to transfer to the LDF.” |
For example, consider the position where an individual had £1m of clean funds deposited overseas at the start of the tax year 1990/91 and it earned interest at a steady 5%. The tax and interest and penalty charges owed to HMRC under the NDO would be around £966,000. The equivalent under the LDF would be just £493,000, a massive difference of £473,000. The savings may be even more marked if the original capital in the account has not been taxed or inheritance tax is outstanding.
John continues, “Clearly there is a tax saving, but a major reason for the difference is the interest on the overdue tax which adds up very quickly indeed. In the early 1990s this was charged at well over 10% for a number of years and, under the NDO calculations, totals more than 100% of the actual tax due for the first few years.
“It is an absolute myth that you must already have a Liechtenstein bank account in order to benefit from the LDF. An interest in relevant property in Liechtenstein can be acquired now and the benefits of the LDF obtained. There are, of course, other variables to properly consider for each individual before determining whether the LDF is viable but, in the right circumstances, the potential savings are significant.”
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For further information, please contact:
Jane Murray, PR, 020 7065 0135, jane.murray@uk.pkf.com
Notes to Editors:
- PKF is a leading firm of accountants and business advisers with more than 1,500 partners and staff operating in 23 offices in the UK mainland firm, a wholly-owned financial planning company and associated offshore practices. The firm specialises in advising growing and entrepreneurial/owner-managed businesses, AIM and fully listed companies, and also has extensive experience in the public and not-for-profit sectors. Principal services include assurance and advisory; taxation; consultancy; corporate recovery and insolvency; corporate finance and forensic. The firm has particular expertise in advising sectors such as hotels and leisure; mining and resource; public sector; real estate and construction; professional practices; not-for-profit; and medical. The firm’s web site is www.pkf.co.uk.
- PKF (UK) LLP also offers financial services through its FSA authorised company, PKF Financial Planning Limited. PKF (Isle of Man) LLC is a limited liability company registered in the Isle of Man. PKF (Guernsey) Limited is incorporated in Guernsey.
- PKF (UK) LLP is a member firm of the PKF International Limited network of legally independent firms. The PKF International Limited network has more than 15,000 people operating in 120 countries around the world.
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