Other terminology: Relevant persons not eligible for clearance
There are a number of circumstances where individuals who have paid the one-off charge are excluded from treating those amounts on which the charge is based as cleared in respect of UK tax liability.
Clearance will not be obtained where an individual is under investigation as at 31 May 2013 and, following entry into force of the Agreement, that individual did not opt irrevocably to pay the one-off charge before that investigation started, or where an individual was subject to an investigation which concluded before 31 May 2013 and, in the course of that investigation, did not take any relevant opportunity to disclose an interest in Swiss assets held either at that time or earlier.
Direct contact between HMRC and a relevant person or their representative, made in connection with any publicised UK disclosure facility and occurring before 31 May 2013, will also prevent any amounts which are subject to the one-off charge from being cleared in respect of UK tax liability. This is the case unless the individual opted irrevocably to pay the one-off charge before any relevant contact occurred.
There are also specific exclusions from clearance for relevant persons who have been subject to criminal prosecution and conviction punishable in the UK by imprisonment of 2 years or more and for situations where relevant assets derive directly or indirectly from criminal activity, including criminal attacks and systematic fraud against the UK tax and benefits regimes.
The term ‘investigation’ has broad meaning and does not necessarily require formal enquiries into returns under S9A TMA 1970 or similar powers to have started. HMRC letters to individuals asking for confirmation that UK tax has been correctly paid in respect of specific named foreign assets will fall within the definition of investigation under Article 2(1)(n)(iii). However HMRC will not consider clearance to be unavailable solely because a technical question is open with a relevant person which cannot be expected to have a connection with Swiss assets.
The full range of circumstances where clearance will not be obtained is detailed at Article 9(13) of the agreement and the term ‘investigation’ is further defined at Article 2(1)(n).