HMRC has issued fresh guidance over the suitability of using the Liechtenstein Disclosure Facility (LDF) versus New Disclosure Opportunity (NDO) after complaints that a lack of clarity could lead tax consultants to give poor advice to clients.
With the November 30th deadline to notify an intention to disclose offshore assets under the NDO fast approaching, tax advisers had been seeking answers on whether clients, in certain circumstances, could transfer assets to Liechtenstein to benefit from the less punitive conditions of the LDF compared to the NDO.
These are principally the recovery of unpaid taxes being limited to a 10-year period and a maximum penalty of 10% of such taxes. The NDO, on the other hand, has a 20-year liability period and possible 20% levy on unpaid tax.
The new guidance principally provides more detail on circumstances in which a person is eligible for the LDF.
However, despite the new information, some tax consultants remain unhappy with HMRC’s approach.
Frank Strachan, senior manager, national tax investigations, for Grant Thornton, said: “It still feels like HMRC are making it up as they go along. What potential disclosers and their advisors require is clarity and certainty, not piecemeal ad hoc assistance.”
For more information visit: www.hmrc.gov.uk/disclosure/liechtenstein-help
