The old model of banking secrecy, now under global threat, may once have been profitable but it also led to clients neglecting other crucial aspects of managing their wealth, the executive chairman of Liechtenstein-based Kaiser Ritter Holding Anstalt has said.

Depositing money away from the prying eyes of revenue departments may have created banking with less margin pressure than more transparent banking, but clients who sought secrecy often ignored other important and even more holistic issues which are important for wealth preservation and growth, Fritz Kaiser told journalists in London. He was speaking at an event highlighting the ongoing Liechtenstein Disclosure Facility agreement between the UK and the tiny Alpine state.

The LDF is one of a raft of measures being adopted by governments around the world to prevent tax revenue leakage to offshore financial centres. As a sign of how determined some nations are to halt this outflow, the government of Germany has even paid for stolen private bank data taken from Switzerland and Liechtenstein. Secrecy has eroded. For example, in 2009, UBS, the Swiss bank, reached an agreement with US authorities to pass over client data to resolve a tax evasion case.

The LDF, created in 2009 and running to 2015, says taxpayers can generally disclose any unpaid UK taxes and pay them with interest and a 10 per cent penalty sum. Importantly, the maximum look-back period is 10 years (as opposed to the 20 years otherwise applicable) and other benefits are also available, such as the possible use of a "composite" rate. The composite rate option can provide substantial savings in a variety of circumstances, including where multiple taxes would otherwise apply, such as both the inheritance and income tax. The composite rate permits a single rate of tax to apply, much simplifying the calculation and often significantly reducing the cost of voluntary disclosure.

Seen as less onerous than some other amnesties and disclosure programmes down the years, the LDF has proven a success, with a number of taxpayers coming forward, although the final judgement will depend on the figures collected by 2015, journalists were told.

“We were surprised how many people came to use now from Switzerland and some islands around here [UK offshore dependencies]. The majority of new business from the LDF has come from abroad [outside Liechtenstein]. Just in the past couple of days some 40 new accounts were brought to Kaiser Ritter through LDF via intermediaries,” Kaiser said.

The head of the UK tax authority said in January the LDF has produced a higher yield than originally expected. Dave Hartnett said the facility could bring in up to £3 billion (about $4.7 billion) by 2015. The original estimate was £1 billion.

Philip Marcovici, a prominent legal expert on issues surrounding offshore financial affairs and private banking, told journalists that one of the great merits of the LDF was that it enabled taxpayers to come clean about all their affairs in one deal.

“By having the LDF be available to those with assets without Liechtenstein, providing the requisite Liechtenstein connection is established, we envisioned that other financial centres would see a flow of relationships to Liechtenstein and seek also to adopt the fully transparent approach advocated by Liechtenstein,” he said.

“The LDF permits the taxpayer to come clean in relation to global assets and without a requirement for all assets to move to Liechtenstein,” Marcovici continued. (Marcovici has recently stepped down from his role of CEO at LawInContext, the organisation he founded and which is an interactive knowledge venture created by international law firm Baker & McKenzie).

Kaiser said the LDF highlighted how jurisdictions that may have been used to old ways of doing things had to adapt and be more entrepreneurial in a world insisting on transparency.

“This challenge of course is not unique to Liechtenstein but is a global issue. To master this we have to accept the need for change and to recognise that developments take place very quickly now. Ultimately, we have to reinvent ourselves in the offshore trust and banking business,” he said.

“One of the main challenges for bankers and offshore centres was, and may still be, how to bring up the topic of tax compliance and solutions such as the LDF, as a UK disclosure programme, in client discussions. This requires the backing of the company, skills, diplomacy and self-confidence," he said.