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Liechtenstein savings accounts receive preferential treatment from UK government

Despite the UK government hitting the headlines recently with a number of groundbreaking agreements with various tax havens around the world, slowly but surely we are seeing signs of preferential treatment being given to some countries. As an example, the UK government has recently announced an amnesty for those holding funds overseas which have not been declared to the UK tax office.

While those with funds in Liechtenstein will be forced to pay back tax for the last 10 years and a 10% penalty on top, other well-known tax havens will see back tax charges covering the last 20 years and potentially higher penalties than the 10% for Liechtenstein accounts. However, inadvertently the UK government may well have opened a tax loophole with the potential for those with undeclared offshore funds able to transfer these from higher penalty countries to Liechtenstein and then declare them.

Rather bizarrely it seems as though the UK government, in its bid to crack open the nut which was the Liechtenstein banking system, may well have significantly reduced potential interest and penalty income. When you consider that current estimates suggest there are around 5000 British investors with accounts in Liechtenstein (involving funds up to a value of £3 billion) against forecasts that up to 100,000 additional accounts could be opened in the short term, to reduce potential tax penalties, the potential loss of income to the UK Treasury could be enormous.

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