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HMRC internal manual

International Manual

Clearance under the agreement: Amounts not cleared: Overview

The maximum value of assets cleared under the agreement is equal to the value of Cr that is used to calculate the amount of the one off charge. Clearance applies as at 31/12/12.

The earliest possible date for establishing the value of Cr is 31/12/10 and only assets held in a relevant account or investment at this date or later will be eligible for clearance.

This means that, for example, withdrawals from a Swiss bank account made prior to 31/12/10 will not be cleared. New amounts introduced from a non-UK source after 31/12/10 will achieve clearance to the extent that their value can be matched to earlier withdrawals although the earlier withdrawals themselves will remain liable to UK tax because they are different assets.

In certain cases individuals may also have to decide how assets are attributed to the maximum value for which clearance is available.

For example, where withdrawals after 31/12/10 mean that an account balance is lower at 31/12/12 than it was at 31/12/10, then the 31/12/10 balance will be used to determine Cr, the maximum value for clearance.

If, however, the lower 31/12/12 balance exists despite income and gains having arisen or further deposits having been made in the period sine 31/12/10, then the individual will need to decide which of the assets featuring in the account at any point in the inclusive period from 31/12/10 to 31/12/12 they wish to treat as cleared, subject to a maximum value equivalent to Cr.

In limited circumstances, it is also possible that Cr will include assets that are not cleared. Where assets are transferred from the UK to a Swiss account in the inclusive period between 06/10/11 and 31/12/12 and Article 9(12)(c) applies, the proportion of any one-off payment that relates to these transfers will be treated as a payment on account of UK tax liability.