Liechtenstein Disclosure Facility: How to Tax Investigations Work

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Worried about a tax investigation? Looking for a tax investigation advisor who can assist you to use the Liechtenstein Disclosure Facility to avoid tax investigation and prosecution? This former Inland Revenue tax investigation senior official reveals how tax investigatons work and how the Liechtenstein Disclosure Facility can help protect you.


If you’re worried about tax investigations for undeclared offshore assets, then this article will explain what to look out for and what to do.

Bob Evans, a 40 year veteran in top level tax investigations who used to work at the highest level in the Inland Revenue, is clear about the top priority for anyone who believes they may be in danger of an Inland Revenue tax investigation.

“Make sure that you’re not at risk of prosecution,” he advises, “If you are, seek qualified legal counsel immediately. Talking to your tax advisor first may be the worst thing you could do. They are obligated to report your situation to Inland Revenue – and they do not have to tell you that they’re doing so.”

Evans says that by going to legal counsel with your tax problems is safer as your discussions are protected by the attorney – client privilege.

If you’re not at immediate risk of prosecution, things are a little simpler. If you have unreported offshore assets, then you have some viable options, including using the Liechtenstein Disclosure Facility to protect yourself from legal action by Inland Revenue, and also largely mitigate the most serious penalties and fines.

Evans is an expert in this disclosure facility and has assisted many people to use it successfully.

According to Evans, the Inland Revenue’s first action, when they discover that you’ve concealed the existence of any offshore assets, is to check to see whether you’ve had any previous reviews or investigations.

If you’ve ever signed a statement of assets and this statement is listed as a ‘full disclosure’ you could be in a lot of trouble.

A false certificate of declaration makes it really easy for the Inland Revenue to take you to court for tax evasion.

Evans advises clients in this situation to immediately speak to a lawyer regarding their specific situation. This then attaches an ‘attorney client privilege’ to their disclosure

However, Evans finds that in most cases, there hasn’t been any previous investigation. When there hasn’t been a full disclosure either on the client’s tax returns or in their business accounts, his advice is to make a full disclosure before an investigation occurs. He believes that full co-operation with the Inland Revenue is the best option.

“My caveat is that the client makes the disclosure with protection from Code of Practice 9.”

Evans cautions that making a disclosure without this protection opens the client to not only a tax investigation, but the harshest of penalties and perhaps even prosecution.

“An unprotected disclosure is the easiest possible thing for Inland Revenue. It’s a full confession,” he warns, “and makes it a cinch for them to prosecute you.”

The best course of action is to first obtain protection, then to make a full disclosure of all offshore and onshore assets. This disclosure should be in the form of a report that includes every single detail regarding your financial and tax affairs.

“However, when a client qualifies for the Liechtenstein Disclosure Facility, we’re talking about a completely different ball game,” says Evans.

This disclosure facility provides some unique benefits to those who currently have undeclared offshore assets. It’s a mechanism designed to assist the U.K. government to recover revenue that they couldn’t otherwise recover, while offering the asset holder some significant benefits to making a disclosure.

Recently the U.K. Government made an agreement with Liechtenstein that U.K. tax payers who have undeclared assets in Liechtenstein will enjoy reduced tax, interest and penalties upon disclosure. And this reduction is not insignificant. The UK Government is offering reductions of 50% to 60% from what would be levied if they discovered the asset themselves.

Another incentive is that people who take advantage of the Liechtenstein Disclosure Facility can make a ‘no name disclosure’ and they are allowed to take their time to make the full report.

Added to that is the benefit that the Inland Revenue will not investigate the client’s tax affairs for the past twenty years as is the case if they discover the assets where there is no disclosure, plus, it offers protection from prosecution.

In return, the Inland Revenue gains countless thousands of pounds of revenue which had been out of their reach.

This makes the Liechtenstein Disclosure Facility a significant help for those who would otherwise be in danger of not only losing all their assets, but also suffer the emotional and health related consequences of severe stress that a nasty and protracted tax investigation can create.

If you believe you’re at risk of tax investigation, especially for undeclared offshore assets, Evans has considerable experience in this area and is currently assisting clients to take advantage of a little known legal, UK approved tax ‘loophole’ known as the Liechtenstein Disclosure Facility or LDF. He advises anyone interested to take advantage of the education offered by the free articles and videos on UK Tax Investigation site.


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