Funds in Swiss bank accounts to be taxed from 2013

16 January 2012 |

The UK and Switzerland have reached an agreement which will see funds in Swiss bank accounts taxed and the proceeds remitted to the UK Treasury.

How it will work

From 2013 Swiss bank accounts of UK taxpayers in Switzerland will be taxed at source and remitted to HMRC.  There will be a one-off levy on the balance and there will be a withholding tax going forward.

The rate of the one-off levy will depend upon how long the account has been open and will range from 19% to 34%.  This will apply to all accounts which were in existence on 31 December 2010 and which still exist on 31 May 2013 and will cover all past tax liabilities.  Where the funds are removed from the Swiss bank accounts prior to 31 May 2013 the tax treatment is presently unclear.  Announcements made to date do not include any provision for taxing assets currently in an account but which are moved before 31 May 2013.  This is contrary to the norm where anti-avoidance provisions generally apply from the date of their announcement.  So at the moment it seems that UK taxpayers have 2 years in which to avoid this levy by moving their funds elsewhere.

From April 2013 tax will be withheld at source.  The relevant rates will be 48% for interest income and 27% for capital gains and the anonymity of the bank account holders will be preserved, unless the account holder makes a voluntary disclosure to HMRC.

Should UK taxpayers with Swiss bank accounts make a voluntary disclosure to the UK tax authorities they will not be subject to the levy or the withholding tax.  Instead it is likely that HMRC will pursue any outstanding taxes plus interest and penalties as applicable.

The position of non-UK domiciled taxpayers who hold Swiss bank accounts is also unclear.  Although it has been suggested that upon providing evidence of their non-domiciled status that they will not be liable to this tax this has not been confirmed.  It is important that this is clarified as many UK non-domiciliaries are not subject to the remittance basis charge on foreign income repatriated to the UK.

One effect of this agreement with Switzerland, should it contain anti-avoidance and/or tracking provisions, could be the movement of funds to Lichtenstein.  Under the Liechtenstein Disclosure Facility (“LDF”) taxpayers are only obliged to make a payment of back taxes from 1999/2000 and not on the total value of their assets, as is the case under the Swiss agreement.  As the LDF includes interest and a penalty, advice should be taken before a decision is made.

This agreement also contains a provision which will enable HMRC to discover whether individual UK taxpayers have Swiss bank accounts.  The number of requests is to be limited and cannot exceed 500 per year.

It is expected that the complete text of the agreement will be published shortly.  We will provide an update once we have reviewed the agreement.


The rates at which the withholding tax will be applied going forward are less than the current top UK tax rates for income tax (50%) and capital gains (28%).  On the face of it, it looks like a great deal for those wealthy enough to take advantage.

For further information or to discuss the issues raised, please contact John Mooney on +44 20 3051 5711.


Content is for general information purposes only. The information provided is not intended to be comprehensive and it does not constitute or contain legal or other advice. If you require assistance in relation to any issue please seek specific advice relevant to your particular circumstances. In particular, no responsibility shall be accepted by the authors or by Abbiss Cadres LLP for any losses occasioned by reliance on any content appearing on or accessible from this article. For further legal information click here.

Related content

13 June 2024
How to apply for certificate of residence in the UK
Where an individual is resident in the UK and has…
29 May 2024
UK Share Plan Reporting 2024: Everything you need to know
The deadline is approaching for the HMRC’s annual return filings…
20 May 2024
Employee Share Plan Reporting 2024: Alerting Your Clients
The UK tax authorities’ (HMRC) submission deadline for annual return…
Subscribe to our newsletter
Stay up to the minute on our latest news and insights?
International reach

We have helped clients meet their HR needs in over 70 countries across five continents.