Liechtenstein could play a central role in helping UK taxpayers with Singapore-based accounts regularise their tax affairs using a voluntary disclosure facility, according to experts.

Liechtenstein could play a central role in
helping UK taxpayers with Singapore-based accounts regularise their tax
affairs, according to experts.

Singapore banks and trust companies, many of
which have been the recipient of flows of undeclared funds out of the UK and
Switzerland, can help clients regularise their affairs by using the
Liechtenstein Disclosure Facility, so-called the UK taxpayer’s “best deal”,
according to Philip Marcovici, a board member
of European wealth manager Kaiser Ritter. Marcovici was also instrumental in
creating the LDF arrangement three years ago.

“The LDF is a very
attractive arrangement for a UK connected taxpayer as one does not need to move
all of their funds to Liechtenstein,” he said at a briefing in Singapore this
week. The event was well-timed after last week's announcement from Singapore's finance minister that the city-state remains "highly vigilant against illicit funds that could threaten its integrity." The government flagged its commitment to fighting tax evasion in line with new recommendations released by the Financial Action Task Force, a think-tank.

“Banks and trust companies in Singapore who may have clients in
need of regularisation. This is a big issue in Singapore as developments over
the last years in Europe, including the EU Savings Directive and, more
recently, the announced deal between the UK and Switzerland, may have resulted
in flows of undeclared funds to Singapore,” Marcovici added.

He said that the LDF is effective in complex situations where assets are held in trusts or foundations, where assets or family members are located in multiple jurisdictions, where wealth is inherited and when tax obligations have changed over time. Unlike many other tax compliance vehicles, the LDF has low tax and interest costs, significantly reduces potential penalties and provides assurances against criminal investigation.

In
the talk to over 100 private client professionals, Marcovici outlined the advantages
to affected taxpayers of the LDF, and how Singapore bank and trust companies
can do the right thing for their clients while retaining the client
relationship.

Marcovici said, “We are experiencing a global sea change in enforcement
and attitudes associated with undeclared funds. Singapore’s move to
“all‐crimes” anti‐money laundering legislation is but one of many global
developments that are forcing the wealth management industry and its clients to
come to grips with tax compliance.”

Kaiser Partner co‐ordinated the session in conjunction with Simon
Michaels, partner at Berwin Leighton Paisner and head of the trusts and
personal tax‐planning group in the firm’s Singapore office. Marcovici and
Michaels presented a number of reasons why Liechtenstein will play a central
role in helping UK taxpayers to regularize their tax affairs.