The agreement, which will come into effect in 2013, provides that between 19% and 34% of the funds in a Swiss bank account will be deducted by the bank and handed over to the UK tax authorities. The rate charged will depend on the amount of time that the account has been open.
In addition, a withholding tax at varying rates (including 48% on interest) will be applied. Account holders who do not want to pay the flat-rate tax can consent to the disclosure of their data to HMRC, who will charge tax, interest and penalties as appropriate.
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