The Liechtenstein Disclosure Facility ("LDF") is a consequence of a Memorandum of Understanding (MOU) between Liechtenstein and the United Kingdom and a Joint Declaration, which was signed together with a Tax Information Exchange Agreement ("TIEA") on 11th August 2009. It offers eligible tax payers in the UK an opportunity to disclose to HMRC so far undeclared assets with a favourable treatment. One of the attractions is that the HMRC assessment is limited to accounting periods or tax years commencing on or after 1 April, 1999, instead of 20 years period usually applied to a UK tax payer with undeclared assets and income. Therefore a lot of back taxes can be saved and an incentive is given to come forward. In calculating the back taxes for the 10 years, either a composite rate of 40% (commencing on or after 1 April 1999) or the actual tax rate can be used. While the composite tax rate might be quicker for calculating the missing amounts the actual tax rate might have a more favourable effect on the tax payer. However, the composite tax rate satisfies all UK tax liabilities including UK Inheritance Tax, Income Tax, Corporation Tax, Capital Gains Tax, Stamp Duty and VAT-Value Added Tax. The composite tax rate will be applied to all income, profits, gains and other sums chargeable with no reliefs or other deductions allowed. Interest and penalties will be due in addition to the composite tax rate. Interest charges are calculated from the date that the tax should have been paid at HMRC’s published rate of interest. A 10% penalty will be levied on the underpaid liabilities. UK tax payers who have undeclared assets and income from before April 1999 are at an advantage over those who have assets for less than 10 years. Only income generated within the 10 year period is liable to tax i.e. the original capital balance before April 1999 is not taxed, but capital balances flowing in to the assets after April, 1999 will be treated as income. HMRC will not start criminal investigation for a tax related offence when making full disclosure under the LDF and the source of funds is not from a criminal activity.