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Old 09.02.2016, 18:41
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UK Ltd company owner residing in Zurich

Hi All,

I'm considering a move to Zurich due to my wife's job offer there.

I have a UK Ltd company, through which I contract and also have an online business that runs through the Ltd company. I pay myself a combination of salary/dividends so as to minimise my tax burden here in the UK. It works out to something like 25k in dividends and 10k in salary per year.

If I move to Zurich, I plan to continue operating the Ltd Company in exactly the same way.

Questions.

1. If I move to Zurich, how will my tax affairs be affected? I assume its fine to continue operating a UK Ltd company, right?

2. Can anyone recommend the most tax effective legal way of paying myself?

3. On what will I be taxed in Switzerland?
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Old 09.02.2016, 19:05
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Re: UK Ltd company owner residing in Zurich

Your liable to tax in CH on works wide earnings

Not sure you your going to ever become UK non resident whilst working for your UK company.

I suspect you need to take specialist tax advice
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Old 09.02.2016, 19:15
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Re: UK Ltd company owner residing in Zurich

Thanks for your reply. I don't understand your first two lines though. Can you clarify?
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Old 09.02.2016, 19:37
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Re: UK Ltd company owner residing in Zurich

You should speak to your accountant.

I was considering keeping my limited company in CH, but my accountant advised winding my company down, as it would be easier for me to setup a Swiss company/go through an umbrella corporationfor my type of business (IT contracting).

From the little I know, you need to be VAT registered (even if your invoices are less than 77k per annum) and you need a special registration at HMRC to operate in in the EU (not sure about CH).

Last edited by AMDG; 09.02.2016 at 19:40. Reason: Words
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Old 09.02.2016, 19:45
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Re: UK Ltd company owner residing in Zurich

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Thanks for your reply. I don't understand your first two lines though. Can you clarify?
Swiss Residents are liable to tax on world wide earnings.

Without a full time contract of employment in CH, to become non UK tax resident you would have to be in the UK less than 16 nights at midnight.
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Old 09.02.2016, 19:58
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Re: UK Ltd company owner residing in Zurich

less than 16 nights at midnight?
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Old 09.02.2016, 20:09
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Re: UK Ltd company owner residing in Zurich

Normally for VAT you need to register where the business provides it's services e.g. if you work in Germany through a UK company you should register and charge your clients German VAT. If it's uncertain where your services are provided then you might not have to do anything but maybe the Swiss would be interested.

Dividends get taxed here with a discount if you're the main owner/shareholder and you get no relief for tax credits in the UK. You probably will get tax relief on actual dividend tax paid though. I dunno how the Swiss feel about you working here but paying no direct tax.
You'll also pay wealth tax on your company's value which can be significant depending on the canton.
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Old 09.02.2016, 20:14
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Re: UK Ltd company owner residing in Zurich

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less than 16 nights at midnight?
Yes thats right, by your 3rd year you can do 45 nights at midnight.


https://www.gov.uk/government/upload...ted_078500.pdf


Of course if you had a full time Job in ZH it would be different.
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Old 09.02.2016, 21:31
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Re: UK Ltd company owner residing in Zurich

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Not sure you your going to ever become UK non resident whilst working for your UK company.
The fact that the OP controls and operates a UK company of itself would not prevent him from becoming a non resident. He would need to meet some of the other criteria before it would be come an issue.
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Old 09.02.2016, 21:37
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Re: UK Ltd company owner residing in Zurich

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The fact that the OP controls and operates a UK company of itself would not prevent him from becoming a non resident. He would need to meet some of the other criteria before it would be come an issue.
As I said, less than 16 nights at midnight will guarantee the OP to be non resident, being he was UK resident in the last 2 years, the no of days will be minimal unless he has a full time contract in CH........
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Old 09.02.2016, 21:38
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Re: UK Ltd company owner residing in Zurich

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If I move to Zurich, I plan to continue operating the Ltd Company in exactly the same way.
When you say you plan to continue operating the company, what does that mean? Just the online part or the contracting too, if contracting where do you intend to contract the UK or Switzerland? There is a very big difference.

Another consideration is the type of permit you expect to get... one dependant on your wife or in your own right???
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Old 10.02.2016, 10:52
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Re: UK Ltd company owner residing in Zurich

Thanks for the replies guys. Have read the "statutory residence test" and am confident I'd satisfy the "non resident for tax purposes" requirement.

My intention is to continue operating the Ltd company from Switzerland. Contracting and the online retailing. All can be done remotely. I will have no need to set foot in the UK so will stay well below the 16 day limit.

Interesting question re: permits. Can you advise where I can find out more information on that? I guess it'd be preferable to have a permit in my own right and not be dependant on my wife's?
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Old 10.02.2016, 13:22
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Re: UK Ltd company owner residing in Zurich

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My intention is to continue operating the Ltd company from Switzerland. Contracting and the online retailing. All can be done remotely.
Well the contract part could be problematic because there are special rules for companies (even non resident ones) who body shop Swiss based employees. I think you'd should get good legal advice to see where you stand on that one. With a bit of luck it will have a minimum impact on you, but still it is good to know where you stand.

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Interesting question re: permits. Can you advise where I can find out more information on that? I guess it'd be preferable to have a permit in my own right and not be dependant on my wife's?
Hopefully others will have better information, but I don't see how you'd qualify for anything other than a dependant permit.
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Old 10.02.2016, 13:44
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Re: UK Ltd company owner residing in Zurich

What do you mean by "body shop" Swiss based employee?

I'm the sole director and employee of the Ltd company.
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Old 10.02.2016, 15:10
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Re: UK Ltd company owner residing in Zurich

Having just been going through this situation... it ain't easy.

There are three residence tests on the HMRC website. If you retain any connection with the UK such as property, or family there, you will likely fall foul of one of them. If single tax resident status is your goal, you have to work very hard to "leave" the UK taxmans clutches. Even if you do escape, be careful not to fall foul of the Permanent Establishment rules with your UK Ltd. You have stock held in the UK? Revenue created there? Unfortunately, the little guy is not treated the same as Google.

I too have a UK Ltd company though which I was previously consulting. I now am employed by a Swiss firm here, but still have the UK Ltd for other work. That gives me the unenviable position of being legally resident in TWO countries... which basically gives the tax people in each a chance to empty your pockets.

There is a dual tax treaty which means what you pay in Swiss is deducted off what you owe in UK, so you don't actually pay twice as much. But the Swiss get first dibs and they have the wealth tax that includes all your worldwide earnings and assets.

There can be certain advantages of being in the UK and working here. There can also be major disadvantages.

I can't stress enough what has already been said. YOU MUST GET PROFESSIONAL TAX ADVICE FROM AN EXPERT. Your situation is not mine and your results may vary.

Getting your own B permit for here will also be awkward unless you can prove the earnings and ability to support yourself.

Good luck, though. It's nice here.


Regards


Ian
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Old 10.02.2016, 15:50
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Re: UK Ltd company owner residing in Zurich

Hi Ian,

That's super useful information and advice. Thank you! I will definitely seek expert advice but I am trying to also get up to speed so I go into any discussion with as much knowledge as possible.

Re: Permit. I am sure my wife's prospective new employer will sort out a permit for me. It does sound like it will need to be dependant on hers, unless they also sort me out with a new job.

Re: Residency for tax purposes I am confident that I will meet and maintain non-UK residency status for tax purposes. I have no family ties to the UK and my business dealings are totally independant of the UK - no stock, premises or any other link to the UK. If I moved to Switzerland tomorrow, I'd take my existing stock (that resides in my living room!) with me and would have no need to set foot in the UK again.

Considering I'm talking about a relatively small personal income (25k in dividends + 10k in salary), would I really be subject to wealth tax?

Do you have any thoughts or feedback on the dividend/salary breakdown if I'm going to be first taxed on the income in Switzerland?
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Old 10.02.2016, 17:20
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Re: UK Ltd company owner residing in Zurich

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Hi Ian,

That's super useful information and advice. Thank you! I will definitely seek expert advice but I am trying to also get up to speed so I go into any discussion with as much knowledge as possible.

Re: Permit. I am sure my wife's prospective new employer will sort out a permit for me. It does sound like it will need to be dependant on hers, unless they also sort me out with a new job.

Re: Residency for tax purposes I am confident that I will meet and maintain non-UK residency status for tax purposes. I have no family ties to the UK and my business dealings are totally independant of the UK - no stock, premises or any other link to the UK. If I moved to Switzerland tomorrow, I'd take my existing stock (that resides in my living room!) with me and would have no need to set foot in the UK again.

Considering I'm talking about a relatively small personal income (25k in dividends + 10k in salary), would I really be subject to wealth tax?

Do you have any thoughts or feedback on the dividend/salary breakdown if I'm going to be first taxed on the income in Switzerland?
In ZH wealth tax will not effect you unless you have other assets, it's peanuts & as the deduction for management exceeds wealth tax in ZH for the first 5 million or so not much to worry about.
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Old 19.02.2016, 00:21
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Re: UK Ltd company owner residing in Zurich

Just coming back to this...

How easy is it to set up a company in Switerland? Might be better than running a UK company given the lower taxes in Switz?
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Old 19.02.2016, 13:55
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Re: UK Ltd company owner residing in Zurich

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Re: Permit. I am sure my wife's prospective new employer will sort out a permit for me. It does sound like it will need to be dependant on hers, unless they also sort me out with a new job.
If you are both UK citizens, you wil have to sort out your own permits. This means that before your wife starts work, you both need to visit the local kreisburo to apply for B permits. You'll need;
- passports
- marriage certificate
- your wife's work contract, stating the duration and salary
- you wife may need an extract of her police record, she may have already been asked for this by her employer, but you should bring it anyway
- proof of residence, hotel invoice, friend's address, services apartment etc

Then it's all quite easy after that!
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Old 19.02.2016, 14:10
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Re: UK Ltd company owner residing in Zurich

Employers don't get involved in obtaining permits for EU nationals. As AMDG says, it's simply a matter of your wife taking her employment contract to the migration office/kreisboro and applying for your permits. Yours will be dependent on her getting hers, but that shouldn't be a problem providing she earns enough to financially support you. You'll be able to work without problems, though you might need to show your business plan/financial status to be self-employed here. Or you can apply separately from her via the self-employment route.
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