So it's 500CHF every time Easy !

Thanks for this thread, lots of very useful information.

Two months ago, after 16 years in CH, I left for the UK. I completed all the required paperwork to get my pillar 2 mandatory contributions paid out. I know the LOB are working on this as I've received correspondence.

However, that's not my immediate concern. What is of concern are my pillar 2 extra-mandatory contributions. The pension company refuses to release them. I've given notice of withdrawal twice, it's only valid for a month and then expires! All my e-mails, including those to the tax consultant who recommended the company, get ignored for a month. If they reply at all they send me another form to fill in.

I'm really fed up of this bureaucratic nonsense. It seems the more you ask, the longer things take.

The company concerned is well known and based in Schwyz. I expected better. It looks like the practice of the Swiss trying to keep money that doesn't belong to them is alive and well.

If anyone has any suggestions as to how I pursue this (apart from expensive lawyers) I'll be very grateful.

JB

Thank you for this great thread, especially to Fatmanfilms. I'm looking for a little help here if anyone is able, I'm getting confused.



I left Switzerland earlier this year to return to the UK, and filled in the LOB form to withdraw my LPP payments, I think in the way described in posts above. About a month ago I received the HMRC form, completed it, and sent it back. I have now received a letter from LOB saying that HMRC have confirmed that on the relevant date of 10/10 I was liable to complulsory insurance in the UK, and that my obligatory LPP is blocked until the conditions of cash payment are fulfilled.


Can anyone throw any light on this? If HMRC are referring to NI then do I need to actually retire in order to not be liable? Any help much appreciated.



Cathy

The 'new' mandatory work place pension is the issue, I suspect you are currently employed. If you become unemployed I think you could make the withdrawal. This is a recent issue since I started the thread, as I do know someone from the forum who did this 5 years ago which is where I got the idea from as everybody I spoke to had said it was impossible.

Thank you for the swift response Fatmanfilms That makes a lot of sense, but I'm currently self-employed, and filled that in on the HMRC form. My understanding was that that the workplace pension scheme only applied to employees. Maybe I should ask HMRC for clarification.

I'll also leave Switzerland soon, I'll be moving to France. I've my 3rd pillar with ZKB and my girlfriend has it with the Post.

My question is, can we withdraw the money while still living in Switzerland if we have some kind of certificate that we are leaving or we can withdraw the money only once we are in the new country?

I'm asking this, because I don't want to pay the high French taxes.

Also is there a table where I can see the tax for each canton?

I used this tool https://www.liberty.ch/en/3a-retirem...thholding-tax/ and it seems that Aargau has the lowest taxation.

Fill in the form linked to earlier in the thread & wait, pretty sure you will be successful.

I doubt you can get it unlit you have left, the pension company will want proof your living in France. Not sure how taxation would work in France, you need to read the DTA with CH.

Lots of very useful information in this thread, does anyone have a contact for Axa Winterthur? (most of my current attempts have been unsuccessful), the Company I worked for has closed down and I left Switzerland 7 years ago, so now looking to withdraw the 2nd Pillar,

how hard did you try? heard of google?

link

Thanks for the reply, i did try hard but will try even harder now!

how is it going, did you find a way to withdraw the money while in Switzerland? It would be great to know

Then can I withdraw from the fund to buy property in UK using the swiss pension money? as the same logic as in Switzerland?

Hi Cathy,

I had exactly the same thing happen. I really don't understand why LOB don't have a list of circumstances on their website when you can and you cannot withdraw the mandatory part. I guess this way they get to hire someone to check it every time. Madness

I think they are referring to national insurance contributions. You don't need to retire to stop paying NI just reach state pension age. But if I remember correctly you can withdraw your pillar 2 when you're 55 so that would be sooner anyway!

Does anyone know how this affects dual citizens if one is a dual citizen EU+Non-Eu and intends to return to a non-EU country after departing Switzerland?

Is the payout of the compulsory and non-compulsory portions from the 2nd pillar paid fully in cash based on the intended residence in the non-EU country and citizenship has no bearing? Is this based on the future address that is declared when one de-registers from the community?

Many thanks!

This is interesting, many thanks! I’m in a similar position. Leaving Switzerland for studies but torn between -

1. Moving the (not insignificant) Pillar 2 into a low tax canton BEFORE leaving
2. Moving it out of the current scheme and into my bank as a vested benefits account
3. Cashing
4. Investing in some funds etc. I’m not quite sure. Management charges seem to be high (2%)


I wonder if these options can be mixed and matched? Also, for a UK citizen does it even make sense to take the cash only to pay huge tax back home?

I am not an accountant, but from what I have read, it depends on which EU county you are immigrating to and whether that country has a bilateral agreement with Switzerland.

For those who plan to go back to the US, there is an agreement in place. As noted in other threads, 6-9 months before one plans to leave Switzerland, it is best to move the Pension 2 asset to a low-cost canton (Schwyz or Zug - if that lower cost canton is applicable! which in our case it is - living in Zurich).

My understanding, if a bilateral agreement is in place, is that a lump sum payout will take place after Swiss taxes have been accounted for. For US tax purposes, we treat our Pension 2 contributions and our employer's contribution as income each year to the IRS.

When we leave, we will only be liable for Swiss Tax on the Pillar 2 asset - which is why one should transfer that asset to a lower tax domicile.

Hope this helps!

Citizenship is irrelevant to the rules.
You will be asked to prove you are living in the new address either residence documentation or confirmation from the tax authorities that you are tax resident there so a min of 6 months after leaving.
The Swiss tax is withholding tax, so in your case it can be reclaimed as the money has been taxed by the US, therefore transferring the tax liability to the US should cost 0 in US taxes. Transferring to a lower Swiss tax domicile scheme will likely be a waste of money

I am not sure I follow you, FMF. I have read that the Swiss authorities will assess a final tax on the pension asset (when one leaves for the US) and that tax rate is contingent on where one resides canton-wise.

I have never read that this tax can be "reclaimed" from the Swiss tax authorities; I just assumed whatever tax we paid in Switzerland would offset our US tax liability for that calendar year.

Would you clarify? Many thanks!

I am in a similar situation, moving from CH back to the US. I have a professional firm helping with the tax situation and here is what they told me and what is happening:


- They told me to get a departure note from the commune, and with that ask the pension fund to pay out before the date of departure. This way I can avoid US taxation.
- The pension fund said no, we can only pay after the departure date as you need proof that you actually left.
- The professional tax advisors told me this is weird and they never had this happen. They also told me if I get the payout before the departure date I will be liable for CH taxes, which will not be witheld as I have a c-permit and am not taxed at source.
- Now I will be taxed at source with the payout as I technically have departed.
- It will be fully taxed at US rates, but I can take the CH paid taxes as a credit, "only" paying the delta.
- In your case, you say you have paid US taxes on your pension contribution, i.e. you have declared them as income. Therefore you assume you will not be taxed on it again. I would really check this to be sure if I were you.
- Lastly, I was told I will not get a physical refund, but rather can take the taxes paid in CH as a credit to my US taxes. I find this quiet weird, as I am not a Swiss tax resident anymore upon payout. I will need to double check this. In your case it does not matter, as if you would get a refund you cannot take the credit. It is more left pocket/right pocket.