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  #161  
Old 15.08.2019, 13:22
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Re: Where to retire?

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Thats hardly going to save any money from living in CH all year round
Need to make a plan. Sustainable businesses set up in both places which generate passive income. At least must pay for air-tickets and Airbnb, few bottles of good local wine and liquors (expensive activities and sports are optional)
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  #162  
Old 15.08.2019, 13:33
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Re: Where to retire?

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Need to make a plan. Sustainable businesses set up in both places which generate passive income. At least must pay for air-tickets and Airbnb, few bottles of good local wine and liquors (expensive activities and sports are optional)
6 months of Airbnb will cost more than annual rent.
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  #163  
Old 15.08.2019, 13:38
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Re: Where to retire?

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6 months of Airbnb will cost more than annual rent.
True. Just a thought of it to move around different places but in reality there are always families and friends to stay with which is what we always do.

Just came back from Joburg and Durban. Absolutely loved it in terms of ethnic diversity, different cultures, nice food and friendly people.
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  #164  
Old 18.08.2019, 15:28
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Re: Where to retire?

If you split your time among different countries e.g. winter in Spain or Portugal, autumn in Switzerland, spring somewhere dry and cool (maybe Italy or the Cote d’Azur) and travel in the summer, could you end up being tax resident nowhere? Obviously other considerations like healthcare and visas would need to be assessed, but purely from a tax perspective...
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Old 18.08.2019, 15:35
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Re: Where to retire?

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Hope you've got somewhere lined up for a side trip once in a while!


Geee ! I did not know it is this hot in i Chicago in februaryhttps://www.englishforum.ch/attachme...go-freezes.jpg
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  #166  
Old 18.08.2019, 15:36
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Re: Where to retire?

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If you split your time among different countries e.g. winter in Spain or Portugal, autumn in Switzerland, spring somewhere dry and cool (maybe Italy or the Cote d’Azur) and travel in the summer, could you end up being tax resident nowhere? Obviously other considerations like healthcare and visas would need to be assessed, but purely from a tax perspective...
The problem is most Banks computers will explode at such a suggestion, it was fine 25 years ago but today very difficult. It's very easy to be in no one country for 183 days, however many jurisdictions have a tie breaker being the place you spend most days.
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  #167  
Old 18.08.2019, 16:01
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Re: Where to retire?

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The problem is most Banks computers will explode at such a suggestion, it was fine 25 years ago but today very difficult. It's very easy to be in no one country for 183 days, however many jurisdictions have a tie breaker being the place you spend most days.
Not sure you would need to go into the details of your plan e.g. CS in Switzerland have my address, but everything is sent electronically to my online banking, HSBC in the UK know I live in Switzerland, but maybe send me one letter a year. I‘m sure in Switzerland a private banking relationship can cope with a multi-domiciled client (and you‘d likely need to be HNW to make the tax savings offset the increased living costs).

The tie-breaker rule is an interesting one though. I wasn‘t aware of that.
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  #168  
Old 18.08.2019, 16:54
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Re: Where to retire?

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Not sure you would need to go into the details of your plan e.g. CS in Switzerland have my address, but everything is sent electronically to my online banking, HSBC in the UK know I live in Switzerland, but maybe send me one letter a year. I‘m sure in Switzerland a private banking relationship can cope with a multi-domiciled client (and you‘d likely need to be HNW to make the tax savings offset the increased living costs).

The tie-breaker rule is an interesting one though. I wasn‘t aware of that.
Being multi tax domiciled is zero issue, you want do have zero domicile that is the issue. Under CRS you have to self declare & will from time the asked to confirm.
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  #169  
Old 19.08.2019, 14:38
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Re: Where to retire?

"Won’t Germany tax the lump sum? "



That is what I suppose but I don't know how much that tax would be.
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  #170  
Old 19.08.2019, 15:17
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Re: Where to retire?

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"Won’t Germany tax the lump sum? "



That is what I suppose but I don't know how much that tax would be.
26.375% of foreign pension lump sums is I believe the amount payable.

"Tax in Germany

German income taxes on residents apply to all income no matter the source country with 45% being the top rate over and above €250,731. A charge of 5.5% on the income tax is levied as a ‘solidarity surcharge’. Church tax is applied for church members.

Being domiciled or your habitual abode being in Germany constitutes residency. This is set at 6 months or more in any given year. Having permanent accommodation in Germany constitutes domicile.

Income sourced in Germany is taxed if the individual is a non-resident but not income sourced worldwide. Non-residents do not pay church tax. Income from pensions held abroad is not taxed for non-residents in Germany but it is for residents. In the case of non-residents drawing income from pensions abroad, there is no tax on remittances.

Residents of Germany with pensions abroad are subject to tax, as discussed, but there is no hard and fast rule. The pension income under German law, and actual foreign income are both taken into account.

Some private capital-based pension schemes are deemed as ‘other income’ because, although they provide income for life, they do not do so until the pension holder is 62. How much of the pension is taxed is dependent on the year of the first payment. If the pension holder began receiving payments in 2015, 70% of their pension income would be taxed.

Other private pension schemes are a little different. The income that is subject to tax can, for example, be taxed at the marginal rate dependent on how much more an individual is drawing in income than the invested capital can sustain over the individuals lifetime. This ‘excess’ is a percentage of the payment amounts and is influenced by the age of the pension holder when they started drawing their pension.

For tax residents in Germany, sums transferred as lump sums from foreign pension schemes (if eligible) are subject to 26.375% tax on the insurance premiums subtracted from benefits figure.

If the contributions to certified private pension plans were tax deductible, than former employees’ pensions are 100% subject to tax.

Lump-sums from foreign pension schemes are taxed as if they have a lump-sum option under the scheme. Therefore, a flat capital gains tax (including solidarity charge) totalling 26.375% applies. German tax law applies including any deductions, for example €1,602 for married couples.

For tax paid on income in foreign countries (with which Germany has a DTA), tax credits are paid. DTAs exist between Germany and approximately 90 countries - Malta and the UK included. Germany does not demand net worth or net wealth tax.

With regards to inheritance tax, foreign pension funds are not treated as a special case and there are not special provisions. The German Valuation Act dictates the assessed value of the pension fund which is subject to between 7% and 50% inheritance and estate tax, although there are exceptions.

If the member is a German resident at the time of death, the beneficiary is a resident at the time that the tax is levied, or either member or beneficiary is a German citizen having emigrated (if applicable) within 5 years prior to the taxable event; then the transfer of foreign property is subject to the above taxes."
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  #171  
Old 19.08.2019, 15:47
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Re: Where to retire?

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German income taxes on residents apply to all income no matter the source country with 45% being the top rate over and above €250,731. A charge of 5.5% on the income tax is levied as a ‘solidarity surcharge’. Church tax is applied for church members.
Just for the record: Nobody pays anything near the top rates. German tax law is the most overengineered set of laws imaginable... and there is a million ways to reduce your taxable income. Every middle class family has a tax advisor who will point them out to you. I have no idea why, but I for example get a tax reduction for employing a part-time cleaner...
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  #172  
Old 19.08.2019, 15:52
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Re: Where to retire?

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Just for the record: Nobody pays anything near the top rates. German tax law is the most overengineered set of laws imaginable... and there is a million ways to reduce your taxable income. Every middle class family has a tax advisor who will point them out to you. I have no idea why, but I for example get a tax reduction for employing a part-time cleaner...

Thanks for pointing this out. I as a single person had a job offer in Germany of 54k net. I calculated this would work out as 2500 net per month (after paying health insurance) using an online calculator. Do you think I could get additional discounts from this figure?
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Old 19.08.2019, 16:00
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Re: Where to retire?

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Thanks for pointing this out. I as a single person had a job offer in Germany of 54k net. I calculated this would work out as 2500 net per month (after paying health insurance) using an online calculator. Do you think I could get additional discounts from this figure?
That depends on a lot of things and I am not a tax specialist, but most likely yes to some extend. I pay one to do my taxes for me... so I cannot say that I am even interested in the bizarre rules. Simply put: Buying real estate, modernizing your home, especially anything that makes it more eco-friendly: tax savings. A lot of costs, especially for private insurances: tax deductible. There are also some tax free savings plans for people to save up for real estate ("Bausparkasse").

At some point did my parents invest in some fond that supported German ship building companies. Not for the poor performance of the investment fond, but because there was some special tax program to support a specific industry… I read that half of all books published on taxes in the world is published in German(!). I cant really explain or defend any of it, it is the result of having government coalitions where every politician is trying to carve out some exception for his specific lobby support or voter clientele...
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Old 19.08.2019, 16:43
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Re: Where to retire?

Thanks for all of this info. I didn't know that buying an apartment could entitle you to tax deductions.
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  #175  
Old 19.08.2019, 17:25
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Re: Where to retire?

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Thanks for all of this info. I didn't know that buying an apartment could entitle you to tax deductions.
As I said everything is super complicated and comes with a ton of conditions. So an apartment is not by itself deductible, but as soon as at least a part of it is used professionally, say you do home office at times can you deduct certain costs and others not. Its really silly and no simply answer can ever be correct.
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Old 19.08.2019, 18:04
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Re: Where to retire?

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As an expat who has been away from my home country for long enough that I don't really have a place to call home.

Now I am thinking of place where I would like to live and also where I would like to retire.

Anyone else in a similar situation? What are your shortlist countries (ignoring visa considerations etc.)? What are your criteria?

For me, I would like:

- Warm/mild climate
- Ideally a tax system that does not tax foreign income/assets
- Good healthcare
- Low cost of living
- Good food

For me, one Hong Kong may be a possibility, and hits a lot of the requirements except that the climate is hot and humid in the summer months.
Well all the Africans are leaving for Europe so could be a good time now to grab a piece of land in Africa
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