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Old 03.12.2014, 13:59
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Tax declaration on overseas asset.

Hi there this is my first post. be kind.


I am a little confused about this situation, maybe somebody here has had to make the same declaration.


I own a small flat in another country (with a mortgage) from before I was married to a Swiss citizen.

  1. Do I have to declare this as a joint asset at its current value?
  2. If so what sort of tax % would I be looking at paying on it?
  3. Is there an amount that is exempt from taxation in Switzerland?
  4. If I am receiving rent into an overseas bank account, but this is being used to cover mortgage repayments, maintenance and property management etc. do I need to declare this as income?


I hate the idea that I have to pay tax on my flat in two different countries, especially if I am not a citizen of one of those countries.


I hope someone can fill me in on this situation, I did look at previous posts but couldn't find a match.


Cheers
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Old 03.12.2014, 14:08
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Re: Tax declaration on overseas asset.

First thing is to see where you live according to the tax authority. That sounds easy but may not be the case if you are travelling, still have access to that house, etc. I guess that being married to a Swiss you both are living in Switzerland and pay taxes here. As the house is rented the tax authority in the other country is not tempted to say you live there but you may need some proof (contract).

Second thing is that you need to declare all income and all fortune in Switzerland. So including the house, rent and also the mortgage.

Third is that the other country also will try to tax you as real estate is always taxed in the country where it is.
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Old 03.12.2014, 16:02
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Re: Tax declaration on overseas asset.

Exactly, its unlikely that you will be double taxed on the house so don't worry
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Old 03.12.2014, 16:09
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Re: Tax declaration on overseas asset.

Tinkiwinki, where do you get that info from ???

We have property in the UK and we pay local taxes there for services- but the property is declared here for tax purpose and we pay tax on it as part of our 'fortune' (lol, that does make me laugh)- here in Switzerland, NOT in the UK, as we are tax resident here and there is no double taxation.
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Old 03.12.2014, 16:16
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Re: Tax declaration on overseas asset.

Quote:
Tinkiwinki, where do you get that info from ???

We have property in the UK and we pay local taxes there for services- but the property is declared here for tax purpose and we pay tax on it as part of our 'fortune' (lol, that does make me laugh)- here in Switzerland, NOT in the UK, as we are tax resident here and there is no double taxation.
This seems normal to me. In theory, since the UK is taxing you locally the Swiss dont bother taxing you on those things. If the UK had a wealth tax (which as far as I know they dont) you would be able to deduct it from the wealth tax you pay here
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Old 03.12.2014, 16:19
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Re: Tax declaration on overseas asset.

Not sure I get your message. What do you mean 'they don't bother'? We are legally required to declare the flat we own in the UK to Swiss taxes, and do pay tax on it here- and yes, it is normal. We only pay local taxes for services in the UK.
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Old 03.12.2014, 16:46
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Re: Tax declaration on overseas asset.

Quote:
Not sure I get your message. What do you mean 'they don't bother'? We are legally required to declare the flat we own in the UK to Swiss taxes, and do pay tax on it here- and yes, it is normal. We only pay local taxes for services in the UK.

Thanks for the feedback everyone.


I guess as my OH is Swiss and we live here we need to declare it as part of our "fortune" although I would not call it that. And I am not sure how that works as this was an asset I had before marriage.


Any info on what sort of % is taxed on a property? We are not high earners by any means, will that also have an effect on how much we can be taxed on this so called "fortune"?
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Old 03.12.2014, 16:50
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Re: Tax declaration on overseas asset.

Which is why I said the word 'fortune' makes me laugh! Tax on said 'fortune' is very low, about .75 of a % on the value, minus mortgage and maintenance/costs. Value if of course difficult to assess accurately if not bought recently- so a sensible (eg on low side) value for the area, size and condition will be accepted for tax purpose. In our case, we used the price paid as it was recent, and values have not changed massively in that area of uk.
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Old 03.12.2014, 16:55
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Re: Tax declaration on overseas asset.

Quote:
Not sure I get your message. What do you mean 'they don't bother'? We are legally required to declare the flat we own in the UK to Swiss taxes, and do pay tax on it here- and yes, it is normal. We only pay local taxes for services in the UK.
Of course you need to declare, that wasnt my point. I meant that some countries (usa cough) will levy taxes on foreign income but allow you to deduct taxes paid to a foreign govt on that income. Its a paper nightmare.

My brief experience with the sytem here is that you are required to report the income but then also deduct it due to "double taxation agreement with Country X"
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Old 03.12.2014, 16:56
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Re: Tax declaration on overseas asset.

We have to declare our UK property in Switzerland, and also pay tax on the rent we receive for it in the UK. This is considered as income and taxed accordingly, with deductions made for mortgage interest and maintenance expenses.
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Old 03.12.2014, 16:58
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Re: Tax declaration on overseas asset.

Quote:
Tax on said 'fortune' is very low, about .75 of a % on the value
That's quite high, here it's 0.1%.

Tom
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Old 03.12.2014, 17:05
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Re: Tax declaration on overseas asset.

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That's quite high, here it's 0.1%.

Tom

Any idea off the top of your head, what it is for Kanton Zürich? 0.1% could be a bearable sum
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Old 03.12.2014, 17:24
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Re: Tax declaration on overseas asset.

Quote:
Which is why I said the word 'fortune' makes me laugh! Tax on said 'fortune' is very low, about .75 of a % on the value, minus mortgage and maintenance/costs. Value if of course difficult to assess accurately if not bought recently- so a sensible (eg on low side) value for the area, size and condition will be accepted for tax purpose. In our case, we used the price paid as it was recent, and values have not changed massively in that area of uk.
It depends how much the 'fortune' is. It can be as high as 5% apparently although there is a maximum amount payable which makes it lower in 'real' terms plus there are ways the to reduce it already mentioned.

http://www.ne.ch/autorites/DFS/SCCO/...s/Baremes.aspx
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Old 03.12.2014, 17:26
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Re: Tax declaration on overseas asset.

0.33 in Zurich up to 200k- goes up to 5.5 depending on value as BM says above.
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Old 03.12.2014, 17:39
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Re: Tax declaration on overseas asset.

OP, you've had a range of responses here, some of which are accurate and some rather approximate (this is normal for EF and indeed any other forum of anonymous individuals with partial experience of the subject matter).

For best results, consult a "Treuhand" or tax accountant. Many on EF recommend Denise Collin at Colfina, tel. 062 875 82 75. She covers Zürich as well as other areas and works wonders. She may even give you the basic information you require without charge.

The bottom line, though, is that you must declare all assets worldwide as part of your global wealth, which is taxed in Switzerland -- subject to double taxation agreements. As the UK does not tax house values, you would pay (very marginal) wealth tax on your real estate in Switzerland and the value for taxation purposes would be reduced by the outstanding loan. In some cases, your net wealth for taxation purposes could even end up negative, despite you clearly owning a positive portfolio!
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Old 03.12.2014, 18:15
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Re: Tax declaration on overseas asset.

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Thanks for the feedback everyone.


I guess as my OH is Swiss and we live here we need to declare it as part of our "fortune" although I would not call it that. And I am not sure how that works as this was an asset I had before marriage.


Any info on what sort of % is taxed on a property? We are not high earners by any means, will that also have an effect on how much we can be taxed on this so called "fortune"?
I would take the fiscal value (not actual value) in the other country and deduct the mortgage. That would be added to your fortune plus what else you have. The tax is very low depending on your canton etc.

I hate that tax on what you own because you already paid tax when you acquired the fortune (income tax on salary etc)
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Old 03.12.2014, 18:21
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Re: Tax declaration on overseas asset.

Quote:
Tinkiwinki, where do you get that info from ???

We have property in the UK and we pay local taxes there for services- but the property is declared here for tax purpose and we pay tax on it as part of our 'fortune' (lol, that does make me laugh)- here in Switzerland, NOT in the UK, as we are tax resident here and there is no double taxation.
I believe others have already answered the question. You are registered as an owner in the country where you have your house. There may or may be not any treaties with that country and Switzerland and all these bilateral agreements are different. Sell the house and see what happens next
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Old 03.12.2014, 18:52
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Re: Tax declaration on overseas asset.

I agree with 22 yards. Get a good accountant to do your first tax return. I did that and got him to explain what he had done. There were several things that I might have missed which he found for me. After that I reckoned I could probably do it myself.
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Old 03.12.2014, 18:57
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Re: Tax declaration on overseas asset.

Quote:
0.33 in Zurich up to 200k- goes up to 5.5 depending on value as BM says above.
However in ZH you can deduct 0.35 to manage your assets upto 5 million, so the rate is actually negative as I have mentioned several times before. You pay more tax by NOT declaring.
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Old 04.12.2014, 08:24
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Re: Tax declaration on overseas asset.

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It depends how much the 'fortune' is. It can be as high as 5% apparently although there is a maximum amount payable which makes it lower in 'real' terms plus there are ways the to reduce it already mentioned.

http://www.ne.ch/autorites/DFS/SCCO/...s/Baremes.aspx

Ummm, that's 0.5%, not 5%.

Tom
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