The proposed 'packages' for each Facility comprise:
- agreement in principle to enhanced reporting of tax information along FATCA (US Government's Foreign Account Tax Compliance Act) principles through and Intergovernmental Agreement (IGA), with alternative reporting arrangements for non-domiciled UK tax residents.
- agreement to negotiate a revised Double Taxation Agreement; and
- agreement on a disclosure facility.
Below are the key aspects of the Facilities, and a table comparing the key aspects to the LDF:
- Disclosure schemes are available 6 April 2013 to 30 September 2016.
- Need to have an asset in the territory (e.g. bank account, interest in company, trust etc.) at some point between 6 April 1999 and 31 December 2013.
- Tax liabilities due from 6 April 1999 only.
- Fixed penalties at lower rates for most years (10% for years to 5 April 2008).
- No immunity from prosecution.
- There will be an identification procedure for the Financial Institutions to go through in order to identify and notify UK clients. The first notification to clients has to be completed by 31 December 2013 with the second due in the six months to 30 September 2016.
- Bespoke service available from HMRC, including "no-names" enquiries.
- Once the exchange of information between the Isle of Man, Jersey, Guernsey and the UK starts, penalties will be up to 200% of the tax if irregularities are discovered by HMRC.
- In the LDF accounts opened through a UK branch or agency do not qualify for the special terms (limitation to 1999 and the fixed penalties). In the Facilities, Isle of Man, Jersey and Guernsey accounts opened through a UK branch or agency do qualify for the special terms (limitation to 1999 and the fixed penalties), although accounts held elsewhere outside the territory in point and the UK do not.
- All previous/ongoing HMRC enquiries or contact by, or participation in, previous HMRC disclosure schemes, or if a relevant person within the terms of the UK Swiss Agreement - excludes the use of Facilities. In the LDF this only applies if there is a criminal or Code of Practice 9 (fraud) investigation.
- Payments on account are expected early in the process.
- Tax deducted under the European Union Savings Tax Directive is deductible against liabilities due under the Facilities.
- HMRC aim to finalise within 9 months from the application to participate in the disclosure facility.
In cases where the CDDF is beneficial the Liechtenstein Disclosure Facility (LDF) also needs to be considered – additional benefits available under the LDF include the use of the Composite Rate Option - a simplified method of computing tax liabilities which can lead to a reduction in the tax cost and in the right circumstances can eliminate Inheritance Tax.
