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The Swiss government has agreed to tax black money held by UK citizens in Swiss bank accounts, for the first time, while still hiding their identity.
The deal could seen between £ 3 billion and £ 6 billion a year being handed to HMRC (Her Majesty’s Revenue and Customs) by Swiss authorities.
The agreement is a part of the HMRC’s latest efforts to track down and tax money hidden in offshore accounts. It follows a similar deal agreed earlier this month between Germany and the Swiss authorities.
The UK citizens’ accounts in Swiss banks will be taxed at between 19% and 34% on the principal sum hidden, depending on how long the account has been running.
The Swiss agreed to make an initial down payment of 500 million Swiss francs (£ 387m) toward the tax liabilities of UK citizens with Swiss accounts.
From 2013, the account holders will also face an annual levy of between 27% and 48% on the income from their accounts, based on whether it has arisen as capital gains, dividends or interest. The UK authorities will also have the right to request the banking details of 500 UK individuals a year for further investigation.
UK citizens will only be able to avoid the new tax measures in Switzerland if they come forward and make a full disclosure of their finances there to HMRC.
(Source: The Times of India, dated 26-8-2011)
(Comment: Will India be able to prevail upon Switzerland to sign a similar deal ? Do we have the necessary political will?)
