Liechtenstein Tax Haven: GBP1bn HMRC Tax Deal

Liechtenstein Tax Haven: £1bn HMRC Tax Deal

Alastair Darling has suggested that the deal struck last month between the UK and Liechtenstein will increase tax collections for HMRC by up to £1bn.

The UK tax agency, HMRC, has finally agreed an information sharing deal with Liechtenstein with an estimated £5bn deposited in the Alpine State by UK investors where interest credited may not have been disclosed for income tax purposes.

HMRC has already signed agreements with tax havens such as Jersey, Guernsey, Isle of Man and the British Virgin Islands to allow the exchange of financial information on UK residents and with a Worldwide clampdown on tax avoidance, with more to follow.  Gibraltar now technically forms part of the UK and therefore the UK.

This agreement comes in addition to many 'havens' opting for full investor information sharing as part of the EU Savings Directive and other tax haven states opting for a withholding tax on interest of up to currently 20% and moving to 35% in 2011 which is then passed on to the UK and other EU member tax authorities.

The Liechtenstein agreement has been forced given that Liechtenstein agreed a similar information sharing arrangement with Germany last year and we expect more havens to succumb to pressure over the coming years as Governments strive to increase revenue.

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