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.