Go Back   English Forum Switzerland > Help & tips > Finance/banking/taxation
Reply
 
Thread Tools Display Modes
  #1  
Old 02.09.2015, 19:35
Newbie 1st class
 
Join Date: Aug 2014
Location: Bern
Posts: 15
Groaned at 0 Times in 0 Posts
Thanked 0 Times in 0 Posts
strawb has no particular reputation at present
Return to UK

I may be returning to the UK next year after working in CH for 9 years now and dont seem to be able to find the right thread to answer a query. Last year i bought a house in the UK by obtaining a mortgage with Natwest Int offshore (this was the only buy-to-let mortgage i could get). When i return i am thinking about withdrawing my 2nd Pillar to pay as much off the mortgage as possible. i just talked to HMRC and they say if i receive the cash once i am resident in the UK the normal UK tax liability will be applicable on 90 % of this sum. I thought if it was being used to buy my residence in the UK it might not be taxable but seems it is. Sorry if this is very ignorant, but if the cash goes to an offshore account does it come under UK tax? Will the pensionskasse only pay this cash once i am a resident of another country? Or can they pay it to me as i leave but before i enter the UK? I understand that i can transfer CH savings to the UK and these are not taxed and it seems a big jump to the rates at which the pension cash would be taxed. Apologies if this answer is already somewhere on the forum.
Reply With Quote
  #2  
Old 02.09.2015, 19:48
fatmanfilms's Avatar
Forum Legend
 
Join Date: Apr 2010
Location: Verbier
Posts: 13,715
Groaned at 209 Times in 181 Posts
Thanked 11,027 Times in 6,254 Posts
fatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond repute
Re: Return to UK

Quote:
View Post
I may be returning to the UK next year after working in CH for 9 years now and dont seem to be able to find the right thread to answer a query. Last year i bought a house in the UK by obtaining a mortgage with Natwest Int offshore (this was the only buy-to-let mortgage i could get). When i return i am thinking about withdrawing my 2nd Pillar to pay as much off the mortgage as possible. i just talked to HMRC and they say if i receive the cash once i am resident in the UK the normal UK tax liability will be applicable on 90 % of this sum. I thought if it was being used to buy my residence in the UK it might not be taxable but seems it is. Sorry if this is very ignorant, but if the cash goes to an offshore account does it come under UK tax? Will the pensionskasse only pay this cash once i am a resident of another country? Or can they pay it to me as i leave but before i enter the UK? I understand that i can transfer CH savings to the UK and these are not taxed and it seems a big jump to the rates at which the pension cash would be taxed. Apologies if this answer is already somewhere on the forum.
Once UK resident you will liable to tax & capital gains on your world wide income regardless of where you put the money.

The pension provider won't pay out the money until you can prove you are UK resident & a bit more..... I waited 9 months before applying you can actually get your full pension Pillar 2 & 3 just by leaving CH & returning to the UK,

I asked about the UK tax situation on another thread & someone pointed out that the UK won't further tax pension lump sums taken from another county where withholding tax has been paid. You need to see if the advise from HMRC you got is correct or not.

I am not UK tax resident so my payout had no additional tax consequences.

Edit

Having looked at HMRC's website I think that 90% will be taxable, shame as it will hugely exceed any tax relief you got when you took out the Pillar 3. Pensions are tax deferred, rather than tax free, you never know what your final liability will actually be.

Last edited by fatmanfilms; 02.09.2015 at 20:03.
Reply With Quote
  #3  
Old 02.09.2015, 20:23
Newbie 1st class
 
Join Date: Aug 2014
Location: Bern
Posts: 15
Groaned at 0 Times in 0 Posts
Thanked 0 Times in 0 Posts
strawb has no particular reputation at present
Re: Return to UK

Thanks for that, although its not great news. when i tried to read the Double Taxation Treaty it almost reads as though it wouldnt be taxed again once the first country has taxed it but HMRC just said otherwise. but perhaps i should ask them again to make sure and maybe even have the DTA to direct them, he certainly had to check before telling me. and yes, i would like to use the 3rd pillar i have, but this will be liable for the same rate of tax and so, in hindsight, it seems it would have been better to have kept earlier years payments into this as savings instead.

It took 9 months for you to get your 2nd and 3rd pillar out? BPK made it sound as though the 2nd pillar should be quite quick once they have the paperwork and some of this can be prepared in advance. I'll wait and see if anyone else has any info to offer.
Reply With Quote
  #4  
Old 02.09.2015, 20:29
fatmanfilms's Avatar
Forum Legend
 
Join Date: Apr 2010
Location: Verbier
Posts: 13,715
Groaned at 209 Times in 181 Posts
Thanked 11,027 Times in 6,254 Posts
fatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond repute
Re: Return to UK

Quote:
View Post
Thanks for that, although its not great news. when i tried to read the Double Taxation Treaty it almost reads as though it wouldnt be taxed again once the first country has taxed it but HMRC just said otherwise. but perhaps i should ask them again to make sure and maybe even have the DTA to direct them, he certainly had to check before telling me. and yes, i would like to use the 3rd pillar i have, but this will be liable for the same rate of tax and so, in hindsight, it seems it would have been better to have kept earlier years payments into this as savings instead.

It took 9 months for you to get your 2nd and 3rd pillar out? BPK made it sound as though the 2nd pillar should be quite quick once they have the paperwork and some of this can be prepared in advance. I'll wait and see if anyone else has any info to offer.
DTT's only mean you get credit for tax already paid, not that there is no further tax to pay.
You need to prove your 'registered', UK has no registration system.
You need to prove your single if you are.....
Need to get clearance from LOB guarantee fund for Pillar 2. Taking it to buy a main residence will make it complicated as if you sell the property the pension money needs to be refunded. Much better to take it because you can
Reply With Quote
  #5  
Old 02.09.2015, 22:01
Newbie 1st class
 
Join Date: Aug 2014
Location: Bern
Posts: 15
Groaned at 0 Times in 0 Posts
Thanked 0 Times in 0 Posts
strawb has no particular reputation at present
Re: Return to UK

Yes, i heard about complications if you have to, or HMRC has to, claim back tax already paid to CH, so would try and time it so either one or other taxes it, rather than sorting out tax credits. Will go and talk to pensionskasse to see exactly what they need and what proof they need of UK 'registration'. That was also a question i thought of what happens if i eventually sold the house, but yes, would be a cash withdrawal anyway. Have learned from BPK that is also possible to take the 1st pillar if you can prove that you will be eligible for a state pension in your country of residence - that was a real surprise, but would probably suffer from a large UK tax liability when added to the 2nd Pillar. i am now beginning to understand why threads on here before have said you need to start planning a return to the uk in the tax year before. Toooo complicated! thanks for the info.
Reply With Quote
  #6  
Old 02.09.2015, 22:08
fatmanfilms's Avatar
Forum Legend
 
Join Date: Apr 2010
Location: Verbier
Posts: 13,715
Groaned at 209 Times in 181 Posts
Thanked 11,027 Times in 6,254 Posts
fatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond repute
Re: Return to UK

Quote:
View Post
Yes, i heard about complications if you have to, or HMRC has to, claim back tax already paid to CH, so would try and time it so either one or other taxes it, rather than sorting out tax credits. Will go and talk to pensionskasse to see exactly what they need and what proof they need of UK 'registration'. That was also a question i thought of what happens if i eventually sold the house, but yes, would be a cash withdrawal anyway. Have learned from BPK that is also possible to take the 1st pillar if you can prove that you will be eligible for a state pension in your country of residence - that was a real surprise, but would probably suffer from a large UK tax liability when added to the 2nd Pillar. i am now beginning to understand why threads on here before have said you need to start planning a return to the uk in the tax year before. Toooo complicated! thanks for the info.
There will be Swiss withholding tax regardless, you get a certificate which HMRC will accept. You just put the info on your tax return.

You can have the Swiss Pillar 1 in addition to the UK OAP.
Reply With Quote
  #7  
Old 02.09.2015, 22:11
Newbie 1st class
 
Join Date: Aug 2014
Location: Bern
Posts: 15
Groaned at 0 Times in 0 Posts
Thanked 0 Times in 0 Posts
strawb has no particular reputation at present
Re: Return to UK

But i was told its also possible to withdraw Pillar 1 as a lump sum under certain conditions.

I'm not sure if people continue to look at this forum after returning to the UK but if anyone has experience of withdrawing Pillar 2 and 3 I would be interested to hear how long each of them took to receive after you had left.

thanks again
Reply With Quote
Reply

Tags
uk tax on 2nd pillar




Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Tax on Return to UK Ravenk Finance/banking/taxation 7 03.01.2015 20:08
Swiss TAX Return and Property Income from the UK and UK Tax Return edfollett Finance/banking/taxation 19 04.02.2014 18:00
Taxes on return to UK. CoderMark Finance/banking/taxation 4 07.02.2012 11:39
UK to CH - Potential Job Offer but return to UK at weekends Keyser Sozoe Permits/visas/government 51 02.02.2012 00:11
Tax upon return to UK? Emma S Finance/banking/taxation 16 07.07.2011 18:10


All times are GMT +2. The time now is 06:44.


Powered by vBulletin® Version 3.8.4
Copyright ©2000 - 2016, Jelsoft Enterprises Ltd.
LinkBacks Enabled by vBSEO 3.1.0