Britain could recover billions of pounds in tax after Switzerland agreed that UK residents with money offshore should pay tax on any interest.
Switzerland’s finance minister Hand-Rudolf Merz said he would ‘begin ministerial negotiations with the aim that UK residents with Swiss bank accounts pay tax on the interest they earn’, according to reports.
Although the details of the deal are yet to be finalised, it will preserve the secrecy of the Swiss banking system.
The agreement will impose a withholding tax on an estimated £100 billion to £125 billion held by wealthy UK investors in Swiss bank accounts.
A second part of the new rules could see a tax levied on accounts inherited from the original holder on death which have never been declared to UK authorities.
Germany is also in negotiations with Switzerland to try and strike a similar deal.
Swiss Bankers Association chairman Patrick Odier said: ‘I am pleased to see our proposal has replaced the idea for an automatic exchange of information to the benefit of all countries involved.’