Swiss account holders could face interest tax charges
Monday 25 October 2010
UK taxpayers with Swiss bank accounts could soon be forced to pay tax on the interest they earn on savings held there, it emerged today.
The Treasury is holding talks with the Swiss government over exchanging information to ensure that people with the accounts pay the right amount of tax.
The Government is asking the Swiss authorities to increase the amount of information they provide to HM Revenue & Customs when it asks for details on accounts held by UK taxpayers, Treasury sources said.
Switzerland has strict laws in place, under which it will not give details on people who have accounts with its banks, unless HMRC can provide a name and say which bank an account is held with.
The law forbids automatic information exchange, under which other countries, such as France and the US, send complete information to HMRC on accounts held by UK taxpayers.
A Treasury source said: "Ministerial negotiations have started between the Swiss and UK Government with the aim that UK residents with Swiss bank accounts pay tax on the interest they earn."
The Treasury is also thought to be asking the Swiss authorities to levy a so-called withholding tax on future interest that is earned on the accounts of UK taxpayers on behalf of HMRC.
The negotiations will also seek to find an agreement on how much tax should be paid on interest that has been earned in previous years.
Treasury sources stressed that the talks were at an early stage, and it is not yet known how much revenue may be raised as a result of them.
Germany is understood to be holding similar negotiations with the Swiss government.
An agreement between the UK and Liechtenstein, which covers a far smaller number of accounts, is expected to raise around £1 billion.
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