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Old 06.11.2015, 14:07
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Cashing in Pillar 3b

My wife has a Pillar 3b (not 3a!) pension linked to life insurance. For various reasons, she's cashing it in after 9 years. The withdrawal form says:

Die Mitteilung an das Steueramt soll auf folgende Art erfolgen:
1. anonym (Abzug 8% Verrechnungssteuer)
2. mit Namensmeldung

I.e. you can have the tax office notified anonymously and they'll just pay over 8%, or you can have the cashing in registered to your name.

The thing that concerns me is that I'm not sure why any tax is due - Pillar 3b comes out of taxed income already, and doesn't confer any tax benefits that I'm aware of.
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Old 06.11.2015, 14:31
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Re: Cashing in Pillar 3b

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My wife has a Pillar 3b (not 3a!) pension linked to life insurance. For various reasons, she's cashing it in after 9 years. The withdrawal form says:

Die Mitteilung an das Steueramt soll auf folgende Art erfolgen:
1. anonym (Abzug 8% Verrechnungssteuer)
2. mit Namensmeldung

I.e. you can have the tax office notified anonymously and they'll just pay over 8%, or you can have the cashing in registered to your name.

The thing that concerns me is that I'm not sure why any tax is due - Pillar 3b comes out of taxed income already, and doesn't confer any tax benefits that I'm aware of.
Credit Suisse says that "capital-accumulating life insurance policies benefit from tax privileges under certain circumstances". Could this apply to your wife's Pillar 3b account?
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Old 06.11.2015, 14:45
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Re: Cashing in Pillar 3b

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Credit Suisse says that "capital-accumulating life insurance policies benefit from tax privileges under certain circumstances". Could this apply to your wife's Pillar 3b account?
Yes, it could be that. We tried calling Skandia, but all they could say was "If we notify anonymously, it's an 8% deduction. Otherwise we give the tax authorities your name." But couldn't say what the consequences might be of taking the other option.
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Old 06.11.2015, 14:57
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Re: Cashing in Pillar 3b

Some 3b products have no income tax on interest and earnings:
https://www.estv.admin.ch/dam/estv/d...9-D-2015-d.pdf

For Baselstadt 8% seems to be the upper bound.
http://versicherungs-broker.ch/wp-co...asel_stadt.pdf
(No direct link found)
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Old 06.11.2015, 15:08
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Re: Cashing in Pillar 3b

That's interesting as the one she was with, Skandia Leben Life Plan ALN 93. is registered as having some tax benefits. What those are is currently unknown.

I've asked my accountant if he has any input on the matter. I'll report back if he says anything useful!
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Old 06.11.2015, 17:35
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Re: Cashing in Pillar 3b

Accountant says:

If you had not declared the insurance as an asset in your tax
declaration, and therefore would have to fear penalties and interest, then you might want to choose the withholding tax option, have the 8% deducted and forget about it.

If you had always declared it in your tax declaration, then there is no
problem in having the insurance company inform tax authority about the
payment of the capital to you.


So there you - a mechanism for getting your money if you've been dodging tax!
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Old 06.11.2015, 17:39
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Re: Cashing in Pillar 3b

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Accountant says:

If you had not declared the insurance as an asset in your tax
declaration, and therefore would have to fear penalties and interest, then you might want to choose the withholding tax option, have the 8% deducted and forget about it.

If you had always declared it in your tax declaration, then there is no
problem in having the insurance company inform tax authority about the
payment of the capital to you.


So there you - a mechanism for getting your money if you've been dodging tax!
Did your accountant mention how much tax would be payable (tax rate) if you declare the amount to the tax authorities? Would it be less than 8%?
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Old 07.11.2015, 11:30
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Re: Cashing in Pillar 3b

If you've already declared the asset, there may be nothing else to pay. It's just part of your overall wealth. However, if there was some tax advantage nonetheless, the amount you'll pay should be way below 8%.

I'll update next year after my 2015 tax is finalised!
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