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Old 22.02.2013, 13:46
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Double Taxation

If a UK national earns money in the UK and Switzerland, do they declare the entire income to HMRC and pay tax on that? And do they decare the entire income in Switzerland too, and pay tax on that?

If the tax to be paid is higher in the UK and lower in Switzerland, is there no rebate from either side? (I am thinking that it might be lower in Switzerland because the number of children and size of mortgage reduce the tax burden.
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Old 22.02.2013, 13:50
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Re: Double Taxation

You do not pay tax in the UK if you have broken residency and have no income generating from the UK, once you have been outside the UK an entire tax year.

Sorry, just reread and see you have earned in both.

It's not a black and white answer.

I would assume you are a UK national, and alas domiciled there. As such, you probably would file on an arising basis instead of remittance. Remittance is when you are taxed on what you bring into the UK from overseas, but there is a remittance base charge which is rather high, 30k if i recall, which is only really preferred by the wealthier people. But UK doms have to file on an arising basis/worldwide

You get overseas workday relfief for income not earned in the UK. This is not taxed at all if I recall. I stopped doing UK taxes 2 years ago so not totally up to date.

In anycase, if income taxed in CH was taxed in UK too, you would get Swiss credit and pay the difference.
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Old 22.02.2013, 13:54
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Re: Double Taxation

There is a Swiss-UK double taxation treaty which should help if you are caught with having to pay tax in both countries.

http://www.hmrc.gov.uk/taxtreaties/in-force/s.htm
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Old 22.02.2013, 14:28
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Re: Double Taxation

I had a similar situation last year having moved from the UK to Germany. If you have had a job in one country followed by a move to another country (so you are not earning in both at the same time) you can request you tax year to be treated by the HMRC as split between the new and old countries for tax purposes. This meant I only had to declare my UK income as the German income was from the "other half" of the split.
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Old 22.02.2013, 14:43
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Re: Double Taxation

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If a UK national earns money in the UK and Switzerland, do they declare the entire income to HMRC and pay tax on that? And do they decare the entire income in Switzerland too, and pay tax on that?

If the tax to be paid is higher in the UK and lower in Switzerland, is there no rebate from either side? (I am thinking that it might be lower in Switzerland because the number of children and size of mortgage reduce the tax burden.
I am in a similar situation with NZ

In NZ I earn income and must pay local NZ tax on the income (due to the type of income it is)
In CH I must declare the NZ income, BUT all it is used for is to set my CH tax level. I do not pay CH tax on NZ income

I can also apply for any receive a CH tax credit for
10% of NZ withholding tax paid on bank account interest
15% of NZ withholding tax paid on share dividends

Getting the tax credit is painless. It is paid out in CH directly into my CH bank account.
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Old 22.02.2013, 15:00
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Re: Double Taxation

If you get income in both the UK and CH, but live in CH, then generally:

- income in the CH is taxed in CH

- income in the UK: some types of income must be taxed in the UK only, other types of income are taxed in CH only. It only depends on the type/nature of income, so basically it is not up to you / a choice for you to make. Double taxation agreements exist should you get taxed for an item 'in the wrong country' by mistake, so that u can be refunded.

- In CH you have to declare the worldwide income and wealth
- In UK you have to declare only the income that is subject to UK tax

You didn't specify what type of income you are talking about. Eg bank interest in the UK will get taxed in the CH, and to avoid paying twice you can fill in a form with your UK bank so that they can stop taking away interest. If they have already taxed it, you can say so on the CH form, and get a refund (of the UK tax paid) from CH. For other items, such as rental income, or work income it can become very complex. Moreover, as the tax years in UK and CH are not aligned it is possible that you may be technically resident in both countries or none for the same tax "year". Furthemore, for some UK taxes, eg inheritance, the UK uses the wierd notion of 'domicile' (where your heart is) which is distinct from 'residence' (where you live) so you may be subject to UK inheritance tax on UK assets long after you have left the UK.
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Old 22.02.2013, 15:12
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Re: Double Taxation

JBZ86 wrote, "In anycase, if income taxed in CH was taxed in UK too, you would get Swiss credit and pay the difference" but what does that mean? If I have to pay 5k tax in the UK but that same income gave a 0 tax bill in Switzerland, can I claim the 5K back?

Slingb: This is university lecturing plus rental income in the UK. Part time job CH.

Is it better to put my UK house into a ltd. and have a dividend? I remit from the UK to here but not the other way.
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Old 22.02.2013, 15:23
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Re: Double Taxation

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I had a similar situation last year having moved from the UK to Germany. If you have had a job in one country followed by a move to another country (so you are not earning in both at the same time) you can request you tax year to be treated by the HMRC as split between the new and old countries for tax purposes. This meant I only had to declare my UK income as the German income was from the "other half" of the split.
This is what I did after seeking advice from HMRC. I also had taxable income from when I was in Switzerland because I rent my house out, but that has such a low profit (interms of taxrebateable, none in terms of actual) that I still got a tax refund.
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Old 22.02.2013, 15:29
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Re: Double Taxation

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JBZ86 wrote, "In anycase, if income taxed in CH was taxed in UK too, you would get Swiss credit and pay the difference" but what does that mean? If I have to pay 5k tax in the UK but that same income gave a 0 tax bill in Switzerland, can I claim the 5K back?

Slingb: This is university lecturing plus rental income in the UK. Part time job CH.

Is it better to put my UK house into a ltd. and have a dividend? I remit from the UK to here but not the other way.
What it means is if the same income is taxable to both countries, but the CH rate is 15% and the uk rate 20%, you pay the 5% difference to the UK, i.e. each country wants its allocable share based on their own rates of taxation.

So, no, you can't claim back what is owed in the UK if that is what is owed. You can only offset foreign tax credits on the same income upto the amount owed.

As far as I am aware, based on your additional info, lecturing (performed in the UK i assume) and the rental, will just be taxed in the UK. Switzerland won't tax any of that I do not believe. The lecturing I assume was performed and earned before becoming tax resident here, and the rental (all year round I assume) will be used to determine your rates of taxation in Switzerland but it won't be taxed itself. Other Swiss filers with UK or other properties can confirm is thats correct. I do not declare any properties myself.
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Old 22.02.2013, 15:34
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Re: Double Taxation

I lecture now. I comute.
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Old 22.02.2013, 15:41
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Re: Double Taxation

OP,

For UK tax and NR/domicile issues, I suggest you check out these documents from HMRC

http://www.hmrc.gov.uk/cnr/hmrc6.pdf

http://www.hmrc.gov.uk/cnr/info-remit.pdf
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Old 22.02.2013, 15:45
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Re: Double Taxation

I am starting to understand. The workday relief will mean I am not taxed on Swiss income, and the Swiss will only use my UK income declaration to determine my tax status.
But,
And is the house better in a limited company or is that just more complicated?
Will the UK HMRC just work out that I need workday relief from my SA form, or do I need to take some separate action?
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Old 22.02.2013, 16:19
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Re: Double Taxation

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Slingb: This is university lecturing plus rental income in the UK. Part time job CH.
To be honest, it may be worth discussing with an accountant (I am not one) as this kind of specific information can be very different from person to person.

The uni job is most likely only taxable in the UK. The remittance basis mentioned, only applies to non-domiciled people, so (if I assume you are British from birth) you are UK domiciled so you dont need to worry.

However, I am not entirely convinced that you pay the 'highest' tax owned.. If a UK law says that item X should not be taxed for non-residents, and it gets taxed, why should one not get a refund? The key thing there is where the tax is owned.. Eg, in the case ""if the same income is taxable to both countries, but the CH rate is 15% and the uk rate 20%, you pay the 5% difference to the UK" this seems to be that what happened is that the income was taxed only in the UK at 20%, and the UK will get reimbursed the 15% from the Swiss.

So I think it is possible to get a refund, otherwise it wouldn't be called a double taxation relief, and hmrc wouldn't have refund forms for income tax paid in the UK!.

But again perhaps you need professional advice. You also need to start by whether you are a 'UK resident' or not (according to the UK definition) - like jonbvn suggested - are you over 183 days in the UK during the uk tax year.
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Old 23.02.2013, 09:42
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Re: Double Taxation

Armed with so much information I was able to call HMCR and ask the right questions. I hope this information might be useful to someone else.
UK TAX Well, I tried. Neither the first person nor the specialist, had heard of Workingday Tax and I had to provide the web address for them to show where I found the document. But that is not yet in force. What I found out is that one must not pay tax on any Swiss income. WORK INCOME: I must pay tax on my UK wage but this can be taxed at source. RENTAL INCOME: I have to pay tax on my rental income whether it is in a company or not, although inside a company will mean I receive a dividend rather than rent and pay only 10% that income. STATE PENSION: There is an option to pay tax on this in Switzerland and a form needs to be completed and returned to HMRC: after that, it no longer needs to be delcared on the SA form. SWISS TAX UK income to be declared but not taxed.

Also, and this is peculiar to my situation, there is a form that one fills in on arriving in Switzerland that is to be sent to HMCR.http://www.hmrc.gov.uk/cnr/p85.pdf but in my case, I had written a note on my tax that I had moved and yesterday they confirmed that had been sufficient.

Thank you for so much help.


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Old 23.02.2013, 09:49
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Re: Double Taxation

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Also, and this is peculiar to my situation, there is a form that one fills in on arriving in Switzerland that is to be sent to HMCR.[URL="http://www.hmrc.gov.uk/cnr/p85.pdf"]
All non residents for tax (Expats) are advised to complete form P85 on leaving the UK.
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Old 25.02.2013, 11:44
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Re: Double Taxation

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JBZ86 wrote, "In anycase, if income taxed in CH was taxed in UK too, you would get Swiss credit and pay the difference" but what does that mean? If I have to pay 5k tax in the UK but that same income gave a 0 tax bill in Switzerland, can I claim the 5K back?
This is what happens (examples):

(a) you paid 1000 tax in the UK, in CH the tax for the same item is 2000, AND double taxation agreements say tax is due in CH: You put on the CH tax form the 1000 you paid in the UK (with documentation), and they will reduce your bill by 1000 to 1000, and they will claim for themselves from HRMC the other 1000

(b) you paid 2000 tax in the UK, in CH the tax for the same item is 1000, and have to pay tax in CH: The swiss will hapilly reduce your tax liability to 0, but wont give you a refund of the rest. ("reduce liability to the amount due in CH". The remaining 1000 you have to get yourself from hmrc. This may is a problem practically, as hmrc has procedures to collect the full amount or exempt the full amount but no partial split (they will need to now what you 'paid' in CH to do so. So in that case it appears you 'paid the highest amount' just becasue there is no easy way to get a partial refund. In that caset it's better (for future years) to ask hmrc not to tax you at all on that income (eg by doing a self assessment), and simply pay the swiss the lower amount.
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Old 29.06.2016, 16:42
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Re: Double Taxation

Dear All,
I earn in UK and live in Geneva. I have been told that I need to pay Swiss taxes on my UK income. I understood this to be wrong...I thought my income only determined my Swiss tax rate instead. Anyone had this issue before?
Thanks
Michelle
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Old 29.06.2016, 16:57
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Re: Double Taxation

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Dear All,
I earn in UK and live in Geneva. I have been told that I need to pay Swiss taxes on my UK income. I understood this to be wrong...I thought my income only determined my Swiss tax rate instead. Anyone had this issue before?
Thanks
Michelle
You pay Swiss tax on all UK income unless that income is only allowed to be taxable in the UK. Income that's taxable only in the UK is services provided there and rental income from UK property. There may be others.
What does your UK income comprise of?
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Old 23.08.2016, 19:19
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Re: Double Taxation

I'm Australian (with Italian passport as well) with a C permit. I have been double-taxed by the Swiss and have received a refund of tax paid for the relevant years by the ATO. Now I've sorted out that part, I need to pay Swiss tax.

My working income (as opposed to dividends/interest etc) is derived from working for business(s) in Australia and I am paid in AUD.

Although in Australia I was a sole trader, self-employed, the Swiss don't want to define me as that and it probably isn't worth the trouble and expense to set myself up to fit their definitions.

However, I'm used to being able to claim Home Office, computer, etc etc. Now, defined as 'salary' earner, they seem to have given me an automatic deduction of 1100CHF for expenses and nothing more on their assessment. In practice my expenses are more like 10K.

I'm checking to see if there is anything I can claim as a salary defined individual that I don't know about. At the Geneva tax office today, I was told Health Insurance is one. Is that really it? Is there anywhere I can find this online?
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Old 21.10.2017, 20:53
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Re: Double Taxation

Hi guys

I found this thread when searching for info for my mother. She is a Swiss passport holder only. Lived in the UK with her UK husband. She has moved back to CH a couple of years ago and closed all ties apart from a basic current account in the UK. She is still married to my father but he is in a care home in the UK.

Basically, she has some income in CH. But her main income is my father's private and state pension in the UK which she transfers through in chunks occasionally to her Swiss account.

Her Swiss accountant recently retired and handed her file over to another one.

He has asked for info on these transfers from my father's UK account (using the power of attorney) to her CH current account, which we provided. But he now claims that she needs to pay circa 8-9,500 CHF income tax wise. I've said to him that that would be double taxation as this income is taxed in the UK, likely at a higher rate.

He also says as they are still married, their incomes are clubbed together for income tax purposes or something or the sort.

Does anyone know a English speaking Berner Oberland based accountant by any chance? One who knows a bit about the UK system as well as Bern? Apart from this income aspect her tax has been pretty straight forward over the years in CH even though she has a property which is part let out.

Thanks very much
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