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Old 24.01.2018, 11:55
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UK tax on Swiss pension withdrawal

Hi,

When leaving Switzerland a couple of years ago I did not manage to withdraw my pillar 2 because I previously made some voluntary contributions. I actually bought back a few years of Swiss Pensions to put more money in the pot and save tax on a bonus that was paid to me over there. The money was blocked for 3 years and now I have started counting the days until I can take the money back (well, everything but the compulsory part).
I am trying to figure out what the damage will be when HMRC ask for their cut. I have been reading contradicting information and would appreciate if someone could advise.
I spoke to HMRC this morning who transferred me to at least 3 specialists but none of them could answer properly. Their default attitude was "you are not 55 so it is income, you'll have to pay tax" which am afraid is a little bit more complicated than that. But they will look into it and should get back to me at some point.
My understanding was there was a tax-free treatment for payments of lump sums relating to foreign service. I have also just found the following

Switzerland: double taxation agreement, Article 18: Pensions
(2) Notwithstanding the provisions of paragraph (1), a lump sum payment derived from a pension scheme established in a Contracting State and beneficially owned by a resident of the other Contracting State shall be taxable only in the first-mentioned State.

Looks like tax is only due in Switzerland.
How did it work out for those of you who withdrew your Swiss pension?

Cheers
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