UK Tax Authorities Sign Agreements With Liechtenstein Tax Information Exchange Agreement (TIEA) 23.09.2009 23/09/2009 The UK Government has signed a new Tax Information Exchange Agreement (TIEA) with Liechtenstein in a bid to recover lost tax from Britons holding assets or accounts there. The principality has had a notoriously secretive banking industry in the past. However it recently found itself under international pressure to be more open following the sale of account holder information at Liechtenstein's biggest bank, LGT, to the German tax authorities by an insider. The principality's ruler, Prince Alois, found his own brother under investigation following the highly publicised leak. The agreement has been signed in conjunction with the launch of the Lichtenstein Disclosure Facility (LDF) under which UK nationals can disclose assets held in the principality and receive a reduced penalty on anything previously undisclosed. Anyone with such assets who makes a full disclosure to HMRC during the offer period will have their penalty for non payment of taxes over the last 10 years capped at 10% of the outstanding amount. Though they will of course also have to pay all the money owed in back taxes and interest. The LDF also offers immunity from prosecution, unless the assets are proceeds of a criminal nature, not solely involving tax evasion. This immunity is offered specifically under the LDF and is in contrast to the New Disclosure Opportunity (NDO) for foreign assets held in other locations, under which immunity is not guaranteed, even for those who do make a full disclosure. Those who do not disclose their financial information to the UK authorities will find their Liechtenstein accounts closed and up to 100% penalties if they are discovered. It is thought up to 5.000 UK investors have money held in Liechtenstein, accounting for an estimated £3 billion. The agreement requires all Liechtenstein financial intermediaries to review their clients and identify those who need to confirm their tax position to HMRC. They must also then advise those clients that they have informed HMRC of this. Such financial advisers are also highly unlikely to face any prosecution for previous dealings with those clients in a bid to aid the process. HMRC are bullish as a result of the agreement. Dave Hartnett, HMRC Permanent Secretary for Tax, said: "Those who have been evading UK tax on assets held in Liechtenstein banks must now settle with us. There are no alternatives." The LDF runs from 1 September 2009 to 31 March 2015 and full details, including the full agreement document, are available from the HMRC website. It should be noted that the LDF is not available where the bank account holding the undisclosed funds was opened via a UK bank or agency, and other considerations may also affect the level of penalty. Those with assets held in Liechtenstein that will be covered by the LDF are advised to seek legal advice prior to disclosure. If you or your firm require advice on anything contained in this article please call Maurice Martin on 020 7421 3883 or make an online enquiry. Press contact Dave Grimshaw Press Officer 0114 274 4397 Email Dave Related articles 20.03.2019Government Issues Recommendation for Leasehold Reform 15.03.2019Irwin Mitchell Recruits Hundreds Of Volunteers For Red Nose Day 2019 15.03.2019Irwin Mitchell Scoops Hat-trick At Birmingham Law Society Legal Awards 13.03.2019Sheffield City Region Launches Global Innovation Corridor At MIPIM 2019 08.03.2019Irwin Mitchell Launches Women in Law Timeline 05.03.2019Does A Rest Break At Work Have To Be Continuous?