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Old 11.03.2019, 14:06
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tax on Uk pension funds

Trying to get a bit of pre accountant chat information, as she charges to the nano second for anything she does.

How do the Swiss treat a lump sum that is in the UK from a UK pension fund, if the monies will not be coming into Switzerland? Emergency tax was deducted at source by the provider, and the R43 form used to reclaim the UK basic rate tax element deducted.

This leaves an outstanding amount of tax paid to HMRC, and they said the tax paid is included when we make our tax declaration here, and refunded effectively by offset against income, which I kinda get.

SO, is the process we attach the P45 I received to the declaration, as surely this will generate a tax on that value, generating Swiss tax, and UK tax?

If anyone can give me a heads up on the process I'd appreciate it.
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Old 11.03.2019, 14:20
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Re: tax on Uk pension funds

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Trying to get a bit of pre accountant chat information, as she charges to the nano second for anything she does.

How do the Swiss treat a lump sum that is in the UK from a UK pension fund, if the monies will not be coming into Switzerland? Emergency tax was deducted at source by the provider, and the R43 form used to reclaim the UK basic rate tax element deducted.

This leaves an outstanding amount of tax paid to HMRC, and they said the tax paid is included when we make our tax declaration here, and refunded effectively by offset against income, which I kinda get.

SO, is the process we attach the P45 I received to the declaration, as surely this will generate a tax on that value, generating Swiss tax, and UK tax?

If anyone can give me a heads up on the process I'd appreciate it.
AFAIK you can elect to have it taxed in the UK or CH by filling in a DT form if you don't take the default UK tax option. UK personal allowance means only £100 tax would be payable on £12,000 of income.
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Old 11.03.2019, 14:49
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Re: tax on Uk pension funds

Indeed FMF, and I have the BRT back, its the balance paid to HMRC. They say it's declared on my Swiss tax return, and whilst really helpful in some respects, the guy at HMRC understandably couldn't help with the mechanism at this end, just saying put the amount of tax paid on your tax return. No doubt our accountant will know... just wanted to find out more about how and what is declared
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Old 11.03.2019, 20:40
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Re: tax on Uk pension funds

Ahaha... you may run into the shitty "Double tax treaty isn't clear about what happens to deductions allowed in one country if they are not allowed in the other..." issue.

Using FMFs example, 12k in UK pays tax only on the 2k above 10k.

Swiss may see it as 12k, which under swiss tax is eligible for X. They then deduct what tax is already paid (100) against what they charge you. Ignoring the UK tax allowance which saved you XXX... so the 100 should have been 100+XXX.

I have run into this in reverse. As a cross border commuter, swiss very sensibly allow my weekly flight costs to be tax deductable. But UK don't see it that way. For them it is home to work travel, so not deductable and I pay tax in UK instead.

However - pensions often have slightly more favourable tax rules. Make sure they know how and why you had to take/get the money. And good luck!

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Ian
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Old 11.03.2019, 20:51
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Re: tax on Uk pension funds

They are not supposed to as if it's 'Taxable in the UK', even if below the £11500 personal allowance & zero tax is actually payable. The Swiss should accept this, the UK would the other way round & specifically state so in the guidance notes.

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Ahaha... you may run into the shitty "Double tax treaty isn't clear about what happens to deductions allowed in one country if they are not allowed in the other..." issue.

Using FMFs example, 12k in UK pays tax only on the 2k above 10k.

Swiss may see it as 12k, which under swiss tax is eligible for X. They then deduct what tax is already paid (100) against what they charge you. Ignoring the UK tax allowance which saved you XXX... so the 100 should have been 100+XXX.

I have run into this in reverse. As a cross border commuter, swiss very sensibly allow my weekly flight costs to be tax deductable. But UK don't see it that way. For them it is home to work travel, so not deductable and I pay tax in UK instead.

However - pensions often have slightly more favourable tax rules. Make sure they know how and why you had to take/get the money. And good luck!

Regards




Ian
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Old 12.03.2019, 21:47
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Re: tax on Uk pension funds

FMF, I hope you are right! (If you are saying what I think you are saying).


Sadly, I can assure you that in my most recent tussle the UK taxman did not accept my argument that income should be calculated for tax on the same basis as in CH - net of deductions allowed here. I also pointed out that part of the guidance notes to them, so was miffed when they rejected it.


OP - let us know how you get on.



Regards




Ian
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Old 12.03.2019, 22:47
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Re: tax on Uk pension funds

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FMF, I hope you are right! (If you are saying what I think you are saying).


Sadly, I can assure you that in my most recent tussle the UK taxman did not accept my argument that income should be calculated for tax on the same basis as in CH - net of deductions allowed here. I also pointed out that part of the guidance notes to them, so was miffed when they rejected it.


OP - let us know how you get on.



Regards




Ian
I think HMRC are correct, UK taxable income would be higher than CH as AVS etc is deducted in CH so not taxable when NI contributions are not tax deductible. Pension income is treated different to regular income.
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