Go Back   English Forum Switzerland > Help & tips > Finance/banking/taxation  
Reply
 
Thread Tools Display Modes
  #21  
Old 10.07.2012, 18:34
dannyt986's Avatar
Forum Veteran
 
Join Date: May 2005
Location: Wollerau, Schwyz
Posts: 1,843
Groaned at 26 Times in 19 Posts
Thanked 733 Times in 491 Posts
dannyt986 has a reputation beyond reputedannyt986 has a reputation beyond reputedannyt986 has a reputation beyond reputedannyt986 has a reputation beyond repute
Re: property in UK - Tax advantage or not

Quote:
View Post
oh, and look to change your mortgage to an offshore one. Isle of man, HK etc
But harder to get at higher prices nowadays. We used to have a Fortis (now BNP Paribas) one at Libor+1% (1.6% now), but minimum quote I could get earlier in the year was closer to 3.5%. Booh hooh.
Reply With Quote
  #22  
Old 10.07.2012, 18:44
AbFab's Avatar
Forum Legend
 
Join Date: Sep 2006
Location: Zürich
Posts: 8,524
Groaned at 364 Times in 251 Posts
Thanked 12,739 Times in 4,345 Posts
AbFab has a reputation beyond reputeAbFab has a reputation beyond reputeAbFab has a reputation beyond reputeAbFab has a reputation beyond reputeAbFab has a reputation beyond reputeAbFab has a reputation beyond repute
Re: property in UK - Tax advantage or not

If you UK property is/was your sole and main residence, the capital gains are not applicable in the UK. This would mean that you actually lived their for some years before moving to CH, but as current market conditions prevented a sale, you rented it out.

I am a little mystified why the UK tax man would say it you need no longer complete a UK tax form, as
a) you still have income in the UK and
b) this is to your advantage. Mortgage interest and other rental expenses like agent's commission, repairs and maintenance can be set against the rental income.

As the UK and Switzerland have a double taxation agreement, any tax due for rental after the deductions in b) above would only be paid once. Either in the UK or here.

Finally, Switzerland has a wealth tax and your UK property should be added to this on your Swiss tax declaration. Wealth tax is low and measure in per mille rather than per cent.

All I can tell you is that this is exactly our situation albeit some 15 years ago. Then the market prevented us selling for 5 years...
__________________
**Triple vaxxed with Moderna plus 2021/22 season flu jab.**
Fed up of smoking? 10 tips to quit in 10 days
Reply With Quote
  #23  
Old 10.07.2012, 21:23
fatmanfilms's Avatar
Forum Legend
 
Join Date: Apr 2010
Location: Verbier
Posts: 21,376
Groaned at 461 Times in 352 Posts
Thanked 23,091 Times in 11,824 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: property in UK - Tax advantage or not

Quote:
View Post

All I can tell you is that this is exactly our situation albeit some 15 years ago. Then the market prevented us selling for 5 years...
The market today isabout hunderd & fifty percent higher than when you sold, salaries have increased about 30% in that same time, so to think that UK property will be higher in the next 10 years than it is today seems most unlikely.

House prices have more to do with lending policies than anything else, aparantly first time buyers cant buy because prices & deposits are too high, the prices will fall to what people can pay......100 times growth in 60 years, it's not sustainable.
Reply With Quote
  #24  
Old 15.07.2012, 15:53
Junior Member
 
Join Date: Feb 2009
Location: Zurich
Posts: 46
Groaned at 3 Times in 3 Posts
Thanked 10 Times in 8 Posts
wpp1 has no particular reputation at present
Re: property in UK - Tax advantage or not

As long as your UK income does not exceed the tax free amount (circa 7k per person) then a UK tax return is not normally requested by the Revenue.

The rental income from overseas properties does not attract CH income tax but yes the money does attract wealth tax if you havn't spent it by 31 Dec!

Seems pretty simple to me ... why all the fuss?
Reply With Quote
  #25  
Old 15.07.2012, 20:08
dannyt986's Avatar
Forum Veteran
 
Join Date: May 2005
Location: Wollerau, Schwyz
Posts: 1,843
Groaned at 26 Times in 19 Posts
Thanked 733 Times in 491 Posts
dannyt986 has a reputation beyond reputedannyt986 has a reputation beyond reputedannyt986 has a reputation beyond reputedannyt986 has a reputation beyond repute
Re: property in UK - Tax advantage or not

Quote:
View Post
As long as your UK income does not exceed the tax free amount (circa 7k per person) then a UK tax return is not normally requested by the Revenue.

The rental income from overseas properties does not attract CH income tax but yes the money does attract wealth tax if you havn't spent it by 31 Dec!

Seems pretty simple to me ... why all the fuss?
No it doesnt attract wealth tax!

The treatment for income and wealth tax is basically the same; it is not taxed but affects the tax rate. In both cases your mortgage/interest is prorated so if you UK house is heavily mortgaged it may work in your favour you by slightly increasing your UK profits.

The fuss is that few people seem to get this simple thing right...
Reply With Quote
  #26  
Old 15.07.2012, 20:27
Junior Member
 
Join Date: Jul 2012
Location: Zurich
Posts: 70
Groaned at 3 Times in 2 Posts
Thanked 62 Times in 35 Posts
Fijiman has earned some respectFijiman has earned some respect
Re: property in UK - Tax advantage or not

Quote:
View Post
I assume that your UK tax situation is quite simple - i.e. the property rental income, reduced by interest and other allowable expenses may be less than your personal allowance, in which case no UK tax would be due.

Although this uk rental income doesn't get taxed in Switzerland, my understanding is that is considered when putting you in a tax bracket.

Therefore, as reducing the mortgage could reduce the interest paid, this could push you up into a slightly higher Swiss tax bracket. However, this really just means that the mortgage overpayment is not as "tax free" an investment as it may first appear.

As FMF says, it really depends what your Swiss marginal tax rate is to see if it is worthwhile.
This is correct.

As a general rule, all worldwide income is taxable for a Swiss resident EXCEPT for income "arising from enterprises and real estate located abroad"
http://www.lowtax.net/lowtax/html/jswpetx.html#income

Also, I note the following quote:

" Swiss-sourced rental income is taxable in Switzerland. Many foreign nationals living in Switzerland own real estate in their home country. During the period of Swiss residence, this real estate may be rented and may produce rental income. This income is not taxable in Switzerland. It is, however, taken into consideration in order to determine the applicable tax rate (an exemption with progression)."
http://www.kpmg.com/global/en/issues...ncome-tax.aspx
Reply With Quote
  #27  
Old 15.07.2012, 20:33
Junior Member
 
Join Date: Jul 2012
Location: Zurich
Posts: 70
Groaned at 3 Times in 2 Posts
Thanked 62 Times in 35 Posts
Fijiman has earned some respectFijiman has earned some respect
Re: property in UK - Tax advantage or not

Quote:
View Post
No it doesnt attract wealth tax!

The treatment for income and wealth tax is basically the same; it is not taxed but affects the tax rate.
Yes, correct. Yes, see #83 here
http://www.pwc.com/us/en/hr-internat...land-folio.pdf
Reply With Quote
  #28  
Old 15.07.2012, 20:41
fatmanfilms's Avatar
Forum Legend
 
Join Date: Apr 2010
Location: Verbier
Posts: 21,376
Groaned at 461 Times in 352 Posts
Thanked 23,091 Times in 11,824 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: property in UK - Tax advantage or not

Quote:
View Post
This is correct.

As a general rule, all worldwide income is taxable for a Swiss resident EXCEPT for income "arising from enterprises and real estate located abroad"
http://www.lowtax.net/lowtax/html/jswpetx.html#income

Also, I note the following quote:

" Swiss-sourced rental income is taxable in Switzerland. Many foreign nationals living in Switzerland own real estate in their home country. During the period of Swiss residence, this real estate may be rented and may produce rental income. This income is not taxable in Switzerland. It is, however, taken into consideration in order to determine the applicable tax rate (an exemption with progression)."
http://www.kpmg.com/global/en/issues...ncome-tax.aspx
Which is pretty much the same as paying tax on it as your liability to tax increases!
Reply With Quote
  #29  
Old 15.07.2012, 21:15
Junior Member
 
Join Date: Jul 2012
Location: Zurich
Posts: 70
Groaned at 3 Times in 2 Posts
Thanked 62 Times in 35 Posts
Fijiman has earned some respectFijiman has earned some respect
Re: property in UK - Tax advantage or not

Quote:
View Post
Which is pretty much the same as paying tax on it as your liability to tax increases!
FMH, no that's not the same at all.

As I specifically quoted, income from foreign real estate is NOT taxable. While it is true that it serves to increase the marginal rates for other taxable income, the increased tax will always be less (usually substantially so) then if the foreign rental income had been taxed.
Reply With Quote
This user would like to thank Fijiman for this useful post:
Reply




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
Very confused about tax on UK property djc1885 Finance/banking/taxation 22 07.05.2013 20:10
UK tax when not a UK resident silverburn Finance/banking/taxation 21 26.05.2012 11:20
UK community & property tax responsibilities for expats living in CH? souler Other/general 7 16.09.2011 10:32
Tax implications on property in UK Cashboy Finance/banking/taxation 17 08.04.2010 16:18
Paying tax on property owned in UK? irishness Finance/banking/taxation 11 13.02.2010 10:37


All times are GMT +2. The time now is 11:50.


Powered by vBulletin® Version 3.8.4
Copyright ©2000 - 2022, Jelsoft Enterprises Ltd.
LinkBacks Enabled by vBSEO 3.1.0