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Old 05.07.2013, 16:19
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UK fails to get tax from Swiss bank accounts.

What exactly does this mean? How do I know if I am domiciled in Switzerland or not.

(not that it matters as I only ever have money in my bank account for 1 weeks after I get paid)

http://www.guardian.co.uk/business/2...tzerland-fails
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Old 05.07.2013, 16:47
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Re: UK fails to get tax from Swiss bank accounts.

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What exactly does this mean? How do I know if I am domiciled in Switzerland or not.

(not that it matters as I only ever have money in my bank account for 1 weeks after I get paid)

http://www.guardian.co.uk/business/2...tzerland-fails
Typically, domicile from a UK standpoint is passed on from your father normally. If your father is UK domiciled, a permanent resident of the UK, even if not living in the UK at the time but had sufficient ties to the UK and was where they regarded home and more morbidly, where one intends to die, then you are UK domiciled too.

But ones domicile can change when all the factors in place show a shift in domicile citing all of the reasons above, re: established permanent resident, ceasing of connection to prior domicile, established permanent home and life in the new place of domicile.

It is a lot harder to shift your domicile then residency. Residency is normally done a day count and sometimes other factors.
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Old 05.07.2013, 16:52
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Re: UK fails to get tax from Swiss bank accounts.

From a Swiss standpoint Domicile is where you live, so in this case residents in Switzerland , who probably have zero UK tax liability in any case.
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Old 05.07.2013, 17:01
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Re: UK fails to get tax from Swiss bank accounts.

its funny as I'm looking at my will at the moment and this issue has come up with my lawyers. the term domicile doesn't mean much legally and is very vague, sorry I can't help for now but if I get a clear definition I'll post it
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Old 05.07.2013, 17:01
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Re: UK fails to get tax from Swiss bank accounts.

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From a Swiss standpoint Domicile is where you live, so in this case residents in Switzerland , who probably have zero UK tax liability in any case.
that's the pragmatic approach and probably the one I will go for

thanks for posting, you saved me a bit of thinking!
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Old 05.07.2013, 17:05
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Re: UK fails to get tax from Swiss bank accounts.

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What exactly does this mean? How do I know if I am domiciled in Switzerland or not.

(not that it matters as I only ever have money in my bank account for 1 weeks after I get paid)

http://www.guardian.co.uk/business/2...tzerland-fails
Do you complete a UK tax form every year?
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Old 05.07.2013, 17:42
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Re: UK fails to get tax from Swiss bank accounts.

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that's the pragmatic approach and probably the one I will go for

thanks for posting, you saved me a bit of thinking!
The UK Revenue's view on Domicile is very different as they try to get IHT from people who have left the UK for 20 or more years It's very difficult to get rid of a UK Domicile of Origin, if you still have some connections & might just return one day or even just miss the UK, your UK Domicile.

Swiss banks never ask about your Domicile, they don't understand the concept.
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Old 05.07.2013, 17:53
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Re: UK fails to get tax from Swiss bank accounts.

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its funny as I'm looking at my will at the moment and this issue has come up with my lawyers. the term domicile doesn't mean much legally and is very vague, sorry I can't help for now but if I get a clear definition I'll post it
http://www.hmrc.gov.uk/cto/customerguide/page20.htm

MAy or may not help
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Old 05.07.2013, 18:02
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Re: UK fails to get tax from Swiss bank accounts.

I think you will find that Swiss Heimat is similar to UK domicile.
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Old 05.07.2013, 19:18
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Re: UK fails to get tax from Swiss bank accounts.

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I think you will find that Swiss Heimat is similar to UK domicile.
Hardly as if you de-register from Switzerland you don't have any more liabilities to tax in the UK.
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Old 05.07.2013, 21:02
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Re: UK fails to get tax from Swiss bank accounts.

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Do you complete a UK tax form every year?
Yes, I am a landlord. But I've only filled on form out so far and I was advised by HMRC to have split. As I was earning in the UK before moving here. My income from my house just about covers my mortgage and running costs (actually it doesn't, but tax wise the principle doesn't count) so this year I will be under the threashold. And listed as foreign.
I know from child custody issues that domicile has no fixed meaning UK and EU courts...... But CH is probably a different kettle of fish
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Old 06.07.2013, 14:38
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Re: UK fails to get tax from Swiss bank accounts.

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The UK Revenue's view on Domicile is very different as they try to get IHT from people who have left the UK for 20 or more years It's very difficult to get rid of a UK Domicile of Origin, if you still have some connections & might just return one day or even just miss the UK, your UK Domicile.

Swiss banks never ask about your Domicile, they don't understand the concept.
The foregoing may be strictly true but is largely irrelevant largely because of tax treaty provisions.

Domicile (in the English-law sense) is relevant for HMRC purposes for IHT (as you note) and for remittance-based non-domiciled income taxation. A Swiss succession might be targeted by HMRC for IHT (an estate tax) and if property is located in the UK IHT would apply to that in any case. But if there is no property and there are no heirs in Switzerland, collection is wildly improbable.

Domicile in the civil-law sense is the place where you have declared your domicile: in Switzerland that's the commune.

But for cross-border income tax purposes it is not domicile but tax residence that is relevant. We can ignore the Gaines-Cooper point (in relation to a UK tax exile who moved to the Seychelles but was deemed by the courts still to be tax-resident of the UK because of his property and family ties and visits there) because the UK-Switzerland tax treaty says so. "Competent Authority" of the two States determines cases where the tax authorities disagree. Still, one could conceptually and practically be dual resident and this could lead to double taxation especially since Switzerland taxes wealth as well as income and there is no tax credit for that in the UK.

FATCA and the EU and UK tax expat banking accords are a mess. Swiss banks do not always know who is and who isn't subject to those, especially if one has presented a Swiss ID card to open the account and has given a Swiss address. And even if an account is reported to HMRC there may be no tax due since many accounts bear no interest and (unlike with the USA - FATCA and FBARs) there is no need to declare assets abroad, only income. And the foreign pages (SA106) do not ask the details of your banks but only the total income by country.

As for "domicile" itself: you can have different domiciles for different purposes as well as different domiciles under the laws of different countries. English-law domicile is uniquely difficult to change ("domicile of origin" vs. "domicile of choice") by comparison with American-law domicile. Here's the leading case on that: http://www.uniset.ca/other/css/182NW227.html (Evan Jones died aboard the Lusitania while en route to retirement from the US to Wales. Held: since he hadn't arrived in Wales his previous domicile, Iowa, prevailed over his domicile of origin, Wales, and his illegitimate daughter inherited rather than the Crown.)
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Old 06.07.2013, 14:39
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Re: UK fails to get tax from Swiss bank accounts.

"But if there is no property and there are no heirs in Switzerland..."

Sorry. Should read "in the UK". And that probably includes offshore jurisdictions given the Rossminster (Tucker) and other similar cases.
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Old 06.07.2013, 14:47
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Re: UK fails to get tax from Swiss bank accounts.

The Guardian article says:

"According to the Swiss Bankers Association (SBA), the deal does not apply to most UK nationals who keep their cash in Swiss banks because they are not domiciled in the UK.

...

"According to the Treasury's red book, which forecasts tax revenues over the next five years, a one-off levy on Swiss assets owned by UK residents, ranging from 21% to 41%, was due to raise £3.2bn in this tax year."

The article confuses domicile (generally the same in Switzerland as tax residence) and tax residence (either ordinary or actual residence in the UK).

As I wrote earlier, many UK-resident holders of Swiss accounts will owe no tax and others will have declared revenue from their accounts. Given the low interest rate on savings the "one-off levy" could only have been reasonable where there was an undeclared securities investment account.

Many, perhaps most, account holders otherwise subject to the levy will avoid the tax because in the relevant years they were non-doms subject to remittance-based taxation (now abolished for long-term UK residents unless they pay a £30,000 annual levy) or they paid or pay the tax and demand a refund. Last I looked the means for justifying exemption and/or refund were still murky.
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Old 07.07.2013, 17:41
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Re: UK fails to get tax from Swiss bank accounts.

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I think you will find that Swiss Heimat is similar to UK domicile.
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Hardly as if you de-register from Switzerland you don't have any more liabilities to tax in the UK.
UK domicile is very similar in definition to Heimat actually. True, Heimat doesn't affect tax, but the notion of UK domicile exists outside of HMRC, and is very old. Definition is very vague, and in the end in case of dispute, only a UK court judge can determine your UK domicile for a particular time period, based on case law.

UK domicile affects other things besides UK inheritance tax. If you live in the UK but are domiciled in an arab country you can legally (UK-wise) have many wives. But if you are UK domiciled, polygamouns marriages are not recognized (even if done abroad).
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Old 07.07.2013, 19:15
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Re: UK fails to get tax from Swiss bank accounts.

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UK domicile is very similar in definition to Heimat actually. True, Heimat doesn't affect tax, but the notion of UK domicile exists outside of HMRC, and is very old. Definition is very vague, and in the end in case of dispute, only a UK court judge can determine your UK domicile for a particular time period, based on case law.

UK domicile affects other things besides UK inheritance tax. If you live in the UK but are domiciled in an arab country you can legally (UK-wise) have many wives. But if you are UK domiciled, polygamouns marriages are not recognized (even if done abroad).
A UK court judge can have an opinion , however its possible to go to the court of appeal & even the House of Lords .
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Old 07.07.2013, 19:40
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Re: UK fails to get tax from Swiss bank accounts.

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UK domicile is very similar in definition to Heimat actually. True, Heimat doesn't affect tax, but the notion of UK domicile exists outside of HMRC, and is very old. Definition is very vague, and in the end in case of dispute, only a UK court judge can determine your UK domicile for a particular time period, based on case law.

UK domicile affects other things besides UK inheritance tax. If you live in the UK but are domiciled in an arab country you can legally (UK-wise) have many wives. But if you are UK domiciled, polygamouns marriages are not recognized (even if done abroad).
That's an interesting proposition. In fact one could argue that English domicile is closer to (Spanish) Vecindad Civil.

What you say is true only in part, and I don't mean to flaunt my knowledge (my mémoire de maîtrise en droit happens to be on the subject). My commune d'oriigine is a place I have never lived in, and been to only for brief visits; I have no living relatives there. I can't recall if my daughter, a surgeon, has even visited there but that's her commune d'origine too. My mum was born there.

And her domicile of origin for all English-law purposes is New York City, where my father was born.

As one of my professors argued (and hey, he drafted the Restatement, Second, of Conflict of Laws) and as I said earlier, one can have different domiciles for different purposes, and never mind the private international law issues because different legal systems define it differently. It all comes down to ancient ecclesiastical law. And hey, you still pay British tax from 6 April to 5 April: how crazy is that?

(Another London-based daughter of mine, a barrister, also has a domicile of origin in New York. And given that she has never married she is more likely than the other to have retained it. And FWIW the children of neither would have US citizenship (an issue of residence) and yet, for English-law purposes (if not income-tax purposes due to later legislation) could be deemed still domiciled there all their lives.)

I would not say that the definition of domicile for either English or American law is "vague". Rather it is difficult of proof in many cases because it depends upon intention, and (at least until we had mobile-phone cell-tower records) facts that often were lied about by (non-)taxpayers.

As for Sharia (a subject I've written published articles on): it is not unusual for English and American courts to recognise plural marriage, but it's almost always in worker compensation, wrongful death and life insurance cases where the deceased was temporarily in that country and his multiple families remained in his country of origin. Recognition of a foreign domicile used to be important in Wills cases but there is a The Hague convention on recognition of Wills and anyway a private international law rule on intestacy and succession that is likely to supersede the "ordre public" rule against.

Thanks for your contribution, which gave me an excuse to rant.
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