Definition of UK Swiss Tax Agreement
On 6 October 2011, the UK and Swiss Governments signed a bilateral agreement to ensure the effective taxation of UK residents with accounts held in Switzerland. Unless the taxpayer authorises disclosure of details of income and gains to HMRC, and pays any associated taxes, Swiss banks will withhold tax at source on interest, dividends and capital gains for all accounts held by UK residents. However, non-domiciled individuals who can provide their bank with a certificate confirming their non-domicile status, and that they are claiming the remittance basis, will only have withholding tax levied on UK source income and gains, and remitted overseas income and gains.
In addition, to settle any historic UK liabilities, a one-off charge of between 19 percent and 34 percent of the account balance is being levied. Again, if the taxpayer authorises the bank to disclose details to HMRC and pays any associated liabilities, the charge will not apply. Non-domiciled individuals who can confirm to the Swiss bank that there are no outstanding UK liabilities can also avoid this charge. (Updated by PwC, March 20 2013)