A first-time comprehensive Double Taxation Convention between the UK and the Principality of Liechtenstein was signed last month. HMRC has also announced details of the UK's treaty negotiating priorities for the year to 31 March 2013 with a stated intention of beginning negotiations on Double Tax Agreements and Protocols with Japan, Portugal and Russia among others.

Together with the Third Joint Declaration on the Liechtenstein Disclosure Facility (LDF) also signed last week, the UK/Liechtenstein Convention is intended to allow ‘a further enhancement in cooperation’ between the UK and Liechtenstein in the field of taxation.

As is usually the case, the Convention generally follows the Organisation for Economic Co-operation and Development Model Double Taxation Convention. The new Convention will be officially published as soon as it is presented to Parliament for approval.

Readers are reminded that the LDF has now been extended to 5 April 2016. In the June edition of tax.point due for publication next week, Andrew Walker of Smith & Williamson LLP writes about recent developments in the LDF and more generally on the area of tax avoidance.

The Third Joint Declaration recently signed further clarifies the LDF. There are a number of changes made; not least being the availability of a Single Charge Rate (SCR) of 50 per cent that Liechtenstein investors might apply to calculate undisclosed UK tax liabilities for the tax year 2010/11. HMRC will publish the full details of the SCR arrangement, including the limitations of eligibility in due course. The earlier decision not to allow a SCR for 2009/10 remains unchanged.

By way of reminder, the LDF agreement allows investors in Liechtenstein who are liable to UK tax to legitimise their tax affairs for the past and ensure they are tax-compliant for the future. HMRC now anticipate the arrangements will result in a take of up to £3 billion.

More information on the LDF together with details of the Third Joint Declaration is available at http://www.hmrc.gov.uk/disclosure/liechtenstein-disclosure.htm

Details of the UK's treaty negotiating priorities for 2012–13 are available at http://www.hmrc.gov.uk/taxtreaties/news/programme-2012-2013.htm