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Old 24.11.2012, 21:06
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Swiss-GB Tax Agreement Bank Charges

Hello,

I got a letter through the post today concerning the Swiss-GB Tax Agreement that is due to come into force on 1 Jan 2013.

The letter says I have 3 options to ensure compliance with this agreement - either sign a waiver to bank confidentiality so past and future info on assets and income can be passed from by bank to the uk tax authorities, or do not authorise anything and the bank will automatically debit my account to the tune of 21-41% for assets and 27-47% for capital gains, or lastly make I can make some kind of "self-declaration".

I thought I was already doing this third option when I filled in my uk tax forms, but clearly this is something else. The letter advises me to get in contact with my "tax expert" promptly to organise a "course of action" before the agreement comes into force.

I'm not trying to fiddle anything but feel annoyed that I have to waive my confidentiality, particularly when the bank "will take the liberty" of charging me a "one-off annual fee" of CHF 500 to implement this. This is doubly irritating as I have 2 accounts and so it seems I may have to pay for this twice!

Can anyone offer some advice on the self-declaration and also on whether this fee is standard practice and avoidable so other way. Any help would be much appreciated, as it feels at the moment that I'm going to be have to pay fairly heavily to implement an agreement between governments that I had little say on.

Thanks in advance,

Joe
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Old 24.11.2012, 21:17
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Re: Swiss-GB Tax Agreement Bank Charges

which bank and are you still classed as a UK resident?

Last edited by rob1; 24.11.2012 at 21:52.
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Old 24.11.2012, 21:19
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Re: Swiss-GB Tax Agreement Bank Charges

Basically I would recommend moving your money elsewhere...
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Old 24.11.2012, 21:25
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Re: Swiss-GB Tax Agreement Bank Charges

Hello,

Yes, I'm still a UK resident and it's AEK

Cheers

Joe
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Old 24.11.2012, 22:36
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Re: Swiss-GB Tax Agreement Bank Charges

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Basically I would recommend moving your money elsewhere...
Elsewhere as in another country. Since it seems like you decare the money the confidentiality waiver is the best option for sure. But 500chf will most likely eat up interest on 100kchf of deposits at current rates.
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Old 25.11.2012, 18:50
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Re: Swiss-GB Tax Agreement Bank Charges

Thanks for the response, but I'd rather not transfer the money if possible as it's tied up with a repayment on a loan. Any other suggestions much appreciated or the name of a good tax expert!!
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Old 25.11.2012, 21:10
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Re: Swiss-GB Tax Agreement Bank Charges

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Hello,

I got a letter through the post today concerning the Swiss-GB Tax Agreement that is due to come into force on 1 Jan 2013.

The letter says I have 3 options to ensure compliance with this agreement - either sign a waiver to bank confidentiality so past and future info on assets and income can be passed from by bank to the uk tax authorities, or do not authorise anything and the bank will automatically debit my account to the tune of 21-41% for assets and 27-47% for capital gains, or lastly make I can make some kind of "self-declaration".

I thought I was already doing this third option when I filled in my uk tax forms, but clearly this is something else. The letter advises me to get in contact with my "tax expert" promptly to organise a "course of action" before the agreement comes into force.

I'm not trying to fiddle anything but feel annoyed that I have to waive my confidentiality, particularly when the bank "will take the liberty" of charging me a "one-off annual fee" of CHF 500 to implement this. This is doubly irritating as I have 2 accounts and so it seems I may have to pay for this twice!

Can anyone offer some advice on the self-declaration and also on whether this fee is standard practice and avoidable so other way. Any help would be much appreciated, as it feels at the moment that I'm going to be have to pay fairly heavily to implement an agreement between governments that I had little say on.

Thanks in advance,

Joe
Welcome to the world of FATCA and the IRS. All this is coming out of the US trying to catch tax evaders with their stupid law.

Dannyt986 has the simplist solution, and probably the cheapest as well. A tax expert will likely cost more than CHF500 x 2.

Just be grateful you still have a bank account in Switzerland; many Americans living here no longer do, thanks to the cantonal banks dumping them.
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Old 25.11.2012, 21:15
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Re: Swiss-GB Tax Agreement Bank Charges

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Welcome to the world of FATCA and the IRS. All this is coming out of the US trying to catch tax evaders with their stupid law.

Dannyt986 has the simplist solution, and probably the cheapest as well. A tax expert will likely cost more than CHF500 x 2.

Just be grateful you still have a bank account in Switzerland; many Americans living here no longer do, thanks to the cantonal banks dumping them.

what has FACTA and the IRS got to do with UK taxation?
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Old 25.11.2012, 21:25
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Re: Swiss-GB Tax Agreement Bank Charges

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what has FACTA and the IRS got to do with UK taxation?
Many countries have been signing similar agreements to the ones the IRS are busily negotiating on information exchange and I suspect this is one of them.
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Old 25.11.2012, 21:26
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Re: Swiss-GB Tax Agreement Bank Charges

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Thanks for the response, but I'd rather not transfer the money if possible as it's tied up with a repayment on a loan. Any other suggestions much appreciated or the name of a good tax expert!!
If you want to keep it in CHF (to match the loan currency), why not see if you can get a CHF account with your UK bank.
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Old 25.11.2012, 21:44
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Re: Swiss-GB Tax Agreement Bank Charges

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Many countries have been signing similar agreements to the ones the IRS are busily negotiating on information exchange and I suspect this is one of them.

UK and CH already had info sharing on accounts many years ago but that was just who held an account, you could agree or the bank would make a payment to the uk of few % of the interest instead
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Old 25.11.2012, 23:44
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Re: Swiss-GB Tax Agreement Bank Charges

Thanks again for all the input - I have to say that this feels a little insane. I'm expected to pay 1000CHF so that the uk tax authorities can confirm that what I've declared on my tax form is correct?! Since when does the citizen have to pay the bill for this kind of tax revenue check? It seems from the advice so far received that I'm probably just going to have to accept that I'm penalised in holding a swiss bank account by being a uk resident, even though I'm a swiss national..... surely that can't be right?!
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Old 26.11.2012, 04:00
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Re: Swiss-GB Tax Agreement Bank Charges

You say your bank is charging you chf 500 if you opt for the disclosure option? I think you must have got the wrong end of the stick. Can you cut and paste your letter without the account details of course, or at least quote from the part where they say they will charge you extra for living in England?

If you opened your account with a UK address, you must take action to authorize disclosure or face a hefty 21% lump sum payment from your capital.

The agreement was unfortunately drawn up on the wrong assumption that all Brits with Swiss bank accounts must be tax dodgers. The agreement therefore favors tax dodgers and criminals who can maintain their secrecy,-at a price and punishes banks with tax compliant clients.

Another stupid law.
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Old 26.11.2012, 08:46
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Re: Swiss-GB Tax Agreement Bank Charges

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Thanks again for all the input - I have to say that this feels a little insane. I'm expected to pay 1000CHF so that the uk tax authorities can confirm that what I've declared on my tax form is correct?! Since when does the citizen have to pay the bill for this kind of tax revenue check? It seems from the advice so far received that I'm probably just going to have to accept that I'm penalised in holding a swiss bank account by being a uk resident, even though I'm a swiss national..... surely that can't be right?!
This new arrangement was agreed to catch tax dodgers. These are people who have millions stashed away in Swiss bank accounts and so avoid UK tax.

If this is you then CHF1000 will be chicken feed.

If this is not you I suggest you write your UK tax office explaining why you have a Swiss bank account. Send them the original of the year-end statement (having taken some copies first) with a covering letter outlining why you think they have got the wrong person...
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Old 26.11.2012, 08:54
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Re: Swiss-GB Tax Agreement Bank Charges

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Thanks again for all the input - I have to say that this feels a little insane. I'm expected to pay 1000CHF so that the uk tax authorities can confirm that what I've declared on my tax form is correct?! Since when does the citizen have to pay the bill for this kind of tax revenue check? It seems from the advice so far received that I'm probably just going to have to accept that I'm penalised in holding a swiss bank account by being a uk resident, even though I'm a swiss national..... surely that can't be right?!
Have you read all the info at http://www.hmrc.gov.uk/taxtreaties/ukswiss.htm

Also you just told us what may be quite a key point. You are a Swiss national. Dual with UK? Non Dom? If just CH suggest you contact the embassy and ask them what other compatriots have been doing.

Switzerland and its overseas depositors are just paying the price for years of tax dodgy-ness. Think of yourself as the innocent dolphin caught in the net!
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Old 26.11.2012, 11:00
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Re: Swiss-GB Tax Agreement Bank Charges

Thanks again for all the follow-up replies - that is exactly what I feel like, an innocent dolphin in the tuna net of tax enforcement!! I'm wondering now if I changed my address for account purposes to a swiss one then perhaps I wouldn't be liable.... anyhow food for thought and I'll see what the embassy says too.
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Old 26.11.2012, 11:14
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Re: Swiss-GB Tax Agreement Bank Charges

This is the line from the letter I received in english, so it's not a mistranslation on my part -

"We will take the liberty of charging you a one-off annual fee of CHF 500.00 in 2013 for the implementation and processing of the tax agreement between Switzerland and Great Britain."

I like the line about taking a liberty, but was left a little unsure about what a one-off annual charge is - is that one-off or annual? My guess is that it's that former, but the annual bit leaves me feeling uneasy. Either way it's still too much, especially considering my deposit there is fairly modest, especially by comparison with many of the actual tax dodgers.
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Old 26.11.2012, 14:16
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Re: Swiss-GB Tax Agreement Bank Charges

If your accounts in CH are 100% tax compliant in UK then I guess the best thing is to give up your bank secrecy rights and check whith the bank about the "one-off" fee.
As a US person living in CH my Swiss bank only offers me the option of surrendering my rights or they will close my accounts!
Welcome to the International Banking Information Exchange club!
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Old 26.11.2012, 17:54
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Re: Swiss-GB Tax Agreement Bank Charges

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This is the line from the letter I received in english, so it's not a mistranslation on my part -

"We will take the liberty of charging you a one-off annual fee of CHF 500.00 in 2013 for the implementation and processing of the tax agreement between Switzerland and Great Britain."

I like the line about taking a liberty, but was left a little unsure about what a one-off annual charge is - is that one-off or annual? My guess is that it's that former, but the annual bit leaves me feeling uneasy. Either way it's still too much, especially considering my deposit there is fairly modest, especially by comparison with many of the actual tax dodgers.
Unfortunately, I suspect it might be an annual fee which is a one off, i.e. yearly, and not a monthly charge on your account. But you should check with your bank to make sure as the English is a bit shaky. The banks are likely to be charging more for having to do all this extra work to meet the various treaty requirements, which is why many Swiss banks have dropped their US customers.
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Old 29.11.2012, 11:18
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This new arrangement was agreed to catch tax dodgers. These are people who have millions stashed away in Swiss bank accounts and so avoid UK tax.

If this is you then CHF1000 will be chicken feed.

If this is not you I suggest you write your UK tax office explaining why you have a Swiss bank account. Send them the original of the year-end statement (having taken some copies first) with a covering letter outlining why you think they have got the wrong person...
I read in a number of articles that these Swiss agreements may have unearthed from intel from caught high net worth tax dodgers /embezzlers giving up the names of others to reduce their severity of prosecution. Once the whistle is blown I guess it's inevitable to cascade.

I read while this is aimed at targeting the high net worth stashers, I guess even the genuine who may have a Swiss account from previously working in Switzerland face giving up their annonimity at the very least which is unlucky. However it also stated somewhere that the 21-34% one off charge, is what HRMC are trying to recover as if it were taxed from the beginning and that after the one off payment, if the assets were not from proceeds of criminal activity, the assets would be tax "regularised" and the account holder issued a certificate to prove this.

Surely for this group of people it is a way to make their undisclosed assets tax compliant AND retain annonimity. Which is a little unfair i guess to many like the OP.
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