Tax agreement with the UK: implementation on schedule, fewer untaxed UK assets than assumed, voluntary disclosure the preferred regularisation method

The implementation of the tax agreement with the UK is proceeding on schedule. Under the terms of the agreement UK clients had until the end of May 2013 to decide whether to regularise the past by opting to pay the one-off flat-rate withholding tax or disclosing their assets to the UK tax authorities.

First indications from selected banks in Switzerland show that there are fewer untaxed UK assets in Switzerland than had been previously assumed. This is mainly due to the fact that many clients have resident non-domiciled status. These clients are not liable to taxation in the UK and thus do not fall under the Agreement. Furthermore, numerous UK clients have opted for voluntary disclosure, which comes as no surprise given the latest developments in Switzerland with regard to the announced adoption of a global standard for the automatic exchange of information.

As a result of these two developments, less tax than expected is being transferred to the UK by means of the one-off payment. The possibility can therefore not be ruled out that either none or only a small part of the banks' guarantee payment of CHF 500 million will be recovered.