Legal advice: Tax deal of the decade
How can a lawyer help reduce your bill from the Inland Revenue?
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HM Revenue and Customs is under increasing pressure to collect as much tax as possible, with optimum cost-effectiveness. In September 2009, it launched the Liechtenstein Disclosure Facility (LDF) as a mechanism for UK taxpayers with undisclosed offshore assets to turn black money into white. In return for a full disclosure, an eligible taxpayer is rewarded with a guarantee of no prosecution, a tax bill (plus interest) going back to 1999 and a penalty of only 10 per cent of the tax.
The deal is open to people with no assets in Liechtenstein, as long as they transfer a meaningful asset into Liechtenstein before applying to join the LDF. If HMRC opens an investigation into a taxpayer, it is too late to enter the LDF and that can mean a 20-year investigation and much higher penalties or even prosecution.
Robert Levy, of Manchester law firm Kuits, has assisted more than 40 taxpayers across the UK with the LDF. "The advantage for clients in discussing the LDF with a lawyer is the protection of legal professional privilege," he says, "so all discussions about a client's tax affairs can be in full confidence. Clients have felt liberated at the end of the process."
Robert Levy is executive partner of Kuit Steinart Levy LLP. www.kuits.com