Liechtenstein Disclosure Facility will now run until 2016

Accountants may be interested to learn that HMRC has extended the Liechtenstein tax agreement until the 5th of April 2016.

The Liechtenstein Disclosure Facility started on the first of September 2009 and was originally due to end at the end of March 2015. Set up by the government to tackle tax evasion, more than 2,000 people have taken advantage of the LDF since its inception.

Under the agreement, UK taxpayers can legitimise their tax affairs in return for lower than normal penalties. The government hopes that all UK taxpayers with assets and investments in the principality will have come forward by the end of the LDF.

Last week the agreement was consolidated with the signing of a Double Taxation Agreement. The purpose of a DTA is to make sure taxpayers of both countries are taxed fairly and the countries receive the correct amount of tax from those individuals. The agreement now brings Liechtenstein in line with the other members of the EEA, all of whom have had a DTA with the UK in place for some time.

The government of Liechtenstein will now enact new laws to make sure information is exchanged between the two nations.

David Gauke, the Exchequer Secretary to the Treasury, explained that the government is committed to making sure individuals with offshore income pay the correct amount of tax. The DTA is a good way forward as it provides greater transparency for taxpayers of both countries.

Commenting on the extension of the LDF, Dave Hartnett said it made sense to extend the Facility especially as the number of received disclosures has already exceeded the total number expected over the entire life of the LDF.

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