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30 August 2011

HMRC to tax Swiss Savings

 

UK Investors with money in Swiss accounts will have tax deducted from their funds, in return for keeping their identities secret, following a deal secured by HM Revenue and Customs (HMRC) to exchange information with Switzerland.

Under the agreement, all Swiss accounts opened by UK Citizens will be subject to a one-off deduction at a rate between 19 per cent and 34 per cent, depending on the type of funds held. Once this deduction has been made, Swiss authorities will impose a new “withholding” tax on all UK-held accounts. This tax rate is expected to be equal to 48 per cent of undeclared income plus 27 per cent of undeclared gains.

However, questions remain as to how the “withholding tax” would be applied to capital gains on hedge funds and structured products.

 

Source: FT 27.08.2011

 

*Article for guidance only. Professional advice should be obtained to ensure that all circumstances are assessed in providing a complete answer.