Hi

This is my first post but have been dipping in and out of numerous threads for the last few months, on a range of topics, since arriving in Switzerland earlier this year. The advice and range of info has really helped us with questions we've had.

I have one question that I have not yet found an answer for on the forum and that is whether there are any tax implications for bringing in a lump sum from the UK to use as a downpayment on a property?

I have had varying advice from accountants and expats who have been here for a while ranging from 30% tax to no tax at all.

Any advice on this would be really appreciated, thanks.
cheers

If it not income, so it cannot be taxed as income, which gets rid of the 30% idea.

However, 'wealth' is taxed in Switzerland, but not by much. It is measured in per mille not per cent on a progressive basis. So if you declare this lump sum you will pay tax on it - the amounts can be found with the tax declaration or your cantonal tax office web sites.

The only danger is that you have to pay retrospectively if you did not declare the amount in previous years....

this is of course assuming you're not yet a resident in the country, I believe. If you're a resident already then..... *good luck*. It may appear as income. Seek professional or semi-professional advice

You're not a racing driver, are you?

I have a similar question. Since arriving in Switzerland, I have regularly sent money back to my savings account in the UK, as the interest has been higher. These savings have been declared annually with the Swiss tax authorities.

We are now in the process of buying a place and would like the bring the money back. Im assuming that there are no tax implications, as I have paid the income tax on it (when I earnt the cash) and the wealth tax on it every year. Oder?

Mind you, given the the lousy exchange rate of the pound: franc, I would have lost all my interest gains anyway!!!

Thanks AbFab and Lob for the advice. I spoke with a local accountant who said that aslong as the money was no longer in my account on 31st Dec then I should be fine as this was the date on which your wealth is assessed. Does that sound familiar to anyone.

Thanks

Couple of questions to ask you!

How long have you lived in Switzerland, i.e. when exactly did you arrive here to live?

When did you move out of the UK?

The point being that you should submit all end-of-year bank statements with you Swiss tax form.

Quite what the advice about the money not being your account on Dec 31 is supposed to mean, I don't know. Is this in your Swiss or UK account? If a Swiss account, where will the money go? If into property, that has to be declared too and questions will still remain as to where the money came from and why it wasn't previously declared.

You can simply say it was a gift or inheritance....

as tax on wealth is very little, it sounds like a lot of effort for very little to take all of your money out on 30th December and drop it in on 1st January.

And I believe the average tax man to flag this event and ensure that your file is followed up the following year.

Yes very familiar. The Swiss authorities will not question a one off transfer of even large amounts of cash into Switzerland as there are far too many reasons why this might not be declared for example property abroad being sold, inheritance, gift, etc. Once it is here that is another thing. Anything in your account as of 31st Dec is taxable for that year as an asset. Theoretically you could transfer the money out again on the 30th but seeing as Switzerland has such **exciting** interest rates why would you ever want it here, unless you are going to use it to do something like buy a house...

True, tax rate on wealth is low. But declaring wealth (for ex. bank account in another country) means one is also letting the tax authorities know the interest you earn on it from the annual bank statement.

If this interest is quite significant say, few thousand euros then this sum is coverted to CHF and added as income and taxed (at an higher tax slab). The additional tax one would thus pay would be several times more than the tax paid on the capital wealth ...

I thus can't understand how from purely financial point of view, declaring wealth means paying only a paltry tax sum ... have I got something wrong?

Ashish

Every asset attracts wealth tax. If the asset yields interest or dividends or bonus or profits, then such yield is taxed as income. Any large changes in declared assets, may provoke the tax office to ask you for an explanation.

Thanks again for all the advice. In the menatime I have been talkin to my bank about the transfer and they seem to be very inquisative about where this money is coming from. I don't know if this them carrying out 'due diligence' on my behalf and my tax implications but it also makes me nervous as they seem to be making it very complicated, suggesting that it is highly likely it will be treated as income and taxed on bringing it in to the country.

My plan is to buy a place with it asap so it will not be sitting in any account gaining interest.

To answer previous question: I have been in CH since Feb.

cheers

By 'your bank', presumably this is a Swiss one. If you have not been with your Swiss bank for very long they don't know you and may well suspect this is money laundering or a sum you have not declared elsewhere. You should be able to calm their fears with some sort of printed proof - they love paperwork...

Banks are mandated to ensure that money laundering is not occurring. Proof of purity could be a tax return from your previous country of residence, showing the assets.

Are you an "US person". If so, the Banks will be very nervous.

Not the duty of the banks to determine tax liability. That is the job of the tax officer.