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Old 21.11.2016, 13:34
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UK non resident landlord and other Swiss tax return questions

Can someone walk me through how I'll be taxed as a UK non-resident landlord in Switzerland please?


We move to Switzerland (Vaud) in Jan 2017, at which point we'll rent out our UK house. Rent will be 1500pm, agent fees 120pm, mortgage 1050pm then whatever insurance will be so "profit" will be approx. 300pm.


I guess we'll be applying to have our rent paid gross as we're expecting to break UK residency and I presume I'll need to declare the income on my Swiss tax return? Given my 2016/17 UK tax return will be due before my 2017 Swiss tax return, how will it work in terms of confirming where I've paid tax (and am I right in thinking I only pay Swiss tax on the rental income/profit)?


And I've seen some bits about declaring the value of assets on the Swiss tax return, how does this work with our house? Do we just put the value of the house or the amount of equity we have? I'm assuming we'd need to declare any savings held in a UK bank account too? Or is it just interest?


ARGH!
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Old 21.11.2016, 15:53
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Re: UK non resident landlord and other Swiss tax return questions

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Can someone walk me through how I'll be taxed as a UK non-resident landlord in Switzerland please?


We move to Switzerland (Vaud) in Jan 2017, at which point we'll rent out our UK house. Rent will be 1500pm, agent fees 120pm, mortgage 1050pm then whatever insurance will be so "profit" will be approx. 300pm.


I guess we'll be applying to have our rent paid gross as we're expecting to break UK residency and I presume I'll need to declare the income on my Swiss tax return? Given my 2016/17 UK tax return will be due before my 2017 Swiss tax return, how will it work in terms of confirming where I've paid tax (and am I right in thinking I only pay Swiss tax on the rental income/profit)?


And I've seen some bits about declaring the value of assets on the Swiss tax return, how does this work with our house? Do we just put the value of the house or the amount of equity we have? I'm assuming we'd need to declare any savings held in a UK bank account too? Or is it just interest?


ARGH!

You pay UK tax on UK rental income. Google your term "non-resident landlord" and you'll see that they'll want your tenants to deduct the tax and pay it for you. Otherwise you can apply to have rent paid gross but you have to fill out a UK tax return and pay UK tax (if applicable) on it.

Here's how it works for me in Basel: You can deduct mortgage interest and a fixed % amount as expenses for your property (or the real expenses) and the rest gets added to your total income to work out your overall tax rate. Your UK income won't be taxed but it will increase your tax rate, I guess not by very much for you. In Basel the rental income is used as a basis for determining the value of the property for wealth tax reasons. It's done automatically in the tax software. There's a 'tax free allowance' (relatively low in Basel) and with a mortgage it might not make much difference to you.

You don't need to confirm to anyone where you've paid tax when it comes to property income. This does apply though to bank interest etc because the Swiss will tax it and the UK might do too and you'll have to show the UK people that you've paid tax in Switzerland. Get all your UK bank interest paid gross, if not already done due to the recent changes.
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Old 01.12.2016, 01:28
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Re: UK non resident landlord and other Swiss tax return questions

You should ask your letting agent for their non-resident landlord tax identification number, then complete the online form NRL1i on HMRC website. Then your letting agent can pay you gross rent. As 3600 is under the UK personal tax allowance you wont have to pay UK tax (unless you've got other income).

You must declare the income to the Swiss tax authorities and the mortgage details. I just got a notice from my accountant warning that the EU and a whole load of other countries are now sharing tax information. I don't know the full details of how the Swiss calculate their tax but I think Landers has already covered that bit. I have heard that the Swiss authorities are very draconian when it comes to paying your tax. I'm not sure if the rumour is true about a work colleague who failed to declare some overseas income for 5 years, got a massive fine which he could never pay, and was then given the choice of prison or deportation and being banned from returning.

BTW, in Zurich the wealth tax is only 0.11% of the equity so if you have a 200k mortgage on a 300k house the tax is only 110 so it's not worth hiding.
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Old 01.12.2016, 14:00
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Re: UK non resident landlord and other Swiss tax return questions

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You should ask your letting agent for their non-resident landlord tax identification number, then complete the online form NRL1i on HMRC website. Then your letting agent can pay you gross rent. As 3600 is under the UK personal tax allowance you wont have to pay UK tax (unless you've got other income).

You must declare the income to the Swiss tax authorities and the mortgage details. I just got a notice from my accountant warning that the EU and a whole load of other countries are now sharing tax information. I don't know the full details of how the Swiss calculate their tax but I think Landers has already covered that bit. I have heard that the Swiss authorities are very draconian when it comes to paying your tax. I'm not sure if the rumour is true about a work colleague who failed to declare some overseas income for 5 years, got a massive fine which he could never pay, and was then given the choice of prison or deportation and being banned from returning.

BTW, in Zurich the wealth tax is only 0.11% of the equity so if you have a 200k mortgage on a 300k house the tax is only 110 so it's not worth hiding.
Strange as fines are very low for tax evasion, if the tax evaded is under 300k a year, (unlimited before Jan 2016)

In Zurich you get 0.3% deduction from income to look after your investments which exceeds wealth tax liability for the first 6 million or so, therefore it pays to declare assets.
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