The Liechtenstein Disclosure Facility (LDF) will run from 1 September 2009 to 31 March 2015.

Under its terms, banks and financial intermediaries in Liechtenstein will be obliged to identify clients who they believe to be UK resident (both individuals and companies), who will then have 18 months to prove that:

·         They are not resident in the UK for tax purposes; or

·         They are resident and are fully tax compliant; or

·         They have notified their intention to make, and in due course have made, full disclosure under the LDF.

UK residents who currently have undeclared funds in an account outside Liechtenstein or the UK will be allowed to transfer these funds to Liechtenstein after 1 September 2009.

They will be able to take advantage of the favourable terms of the LDF from 1 December 2009 provided the bank account holding the undisclosed funds is not opened via a UK bank branch or agency.

Running parallel to the LDF is what HMRC have said is the last opportunity UK taxpayers will have to disclose unpaid tax related to offshore bank accounts, investments and complex structures i.e. the New Disclosure Opportunity (NDO).         

The terms of eligibility for the LDF are complex as well as how the terms interact with the NDO and anyone seeking to take advantage of either of these two disclosure opportunities should seek professional advice as soon as possible. 

Posted on 24 Sep 2009