Dividend payers alerted to LDF’s closure

Dividend income from shares paid into a foreign bank account are among the transactions covered by the Liechtenstein Disclosure Facility which is about to close, accountants warn.

Other normal circumstances where offshore tax liabilities may have arisen but can be dealt with via the “generous” LDF include CGT or rent on holiday homes, says UHY Hacker Young.

“The LDF is [not] just for people who have stashed away millions in offshore tax havens,” the advisory said in an online update, which reminds the LDF is closing on December 31st.

The updated adds: “It is highly unlikely that HMRC will offer another opportunity to ‘come clean’ about offshore assets that is as generous as the LDF.”

The alert come just one week after Tax Networks Ltd, a specialist on HMRC disputes, pointed out that the benefits of LDF have diminished.

But the facility is still likely to be seen as a ‘lesser evil’ than the ‘strict liability’ offence which, without proof of intent, can result in jail if overseas income or assets are undeclared.

“Strict liability will apply if the potentially lost revenue exceeds £5,000,” said UHY’s Mark Giddens.” HMRC and the judiciary are likely to take a harsher view of cases involving professional people”.

Even those with patchy tax records or undisclosed income from a long time ago were urged to consider the LDF, for which HMRC stipulates registration – not settlement – by the 31st.

“However,” said Giddens, “you will need to have done some preparation and, ideally, taken advice as to whether the LDF is the best route for you, so it is best not to leave it too late.”