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-   -   Tax Tips prior to investement (https://www.englishforum.ch/finance-banking-taxation/297729-tax-tips-prior-investement.html)

ipoddle 20.04.2020 09:52

Tax Tips prior to investement
 
I'm thinking of putting some money (lets say 100k chf for arguments sake) into some investments (yep, I know that's vague)

Before doing that.. and ignoring pensions and 3rd pillar.. are there any tax tips which mean it's better (from a tax perspective) to put in money in any particular investment type.

aSwissInTheUS 20.04.2020 10:41

Re: Tax Tips prior to investement
 
Capital gain is tax free (save real estate and professional trading).
Dividend, interest is taxed.

ipoddle 20.04.2020 15:11

Re: Tax Tips prior to investement
 
thanks...

so, again to be simplistic, are there any types of investments (bonds, equities, etfs etc) which are any more or less tax efficient ?

(i'm assuming here the answer is 'no' but I've learned the hard way it's better to ask dumb questions before making a decision)

wantone 20.04.2020 15:29

Re: Tax Tips prior to investement
 
Quote:

Originally Posted by ipoddle (Post 3173521)
thanks...

so, again to be simplistic, are there any types of investments (bonds, equities, etfs etc) which are any more or less tax efficient ?

(i'm assuming here the answer is 'no' but I've learned the hard way it's better to ask dumb questions before making a decision)

If you don't do many trades it is better to buy and sell stocks (that they don't give dividends or they give very little) therefore get capital gains that are tax free.

Then again it depends on your total income. If you don't have salary income then you may want to get some dividends.

fatmanfilms 20.04.2020 15:35

Re: Tax Tips prior to investement
 
Quote:

Originally Posted by ipoddle (Post 3173521)
thanks...

so, again to be simplistic, are there any types of investments (bonds, equities, etfs etc) which are any more or less tax efficient ?

(i'm assuming here the answer is 'no' but I've learned the hard way it's better to ask dumb questions before making a decision)

Berkshire Hathaway would be 100% tax efficient as it pays zero dividend & capital gains are tax free, where bonds are generally bought for income which is taxable in full, going forward when interest eventually rates rise, the capita; value will fall. As Bonds are paying less than inflation they have to be a poor long term investment. Why would you lend money for less than a couple of % above inflation?

Uaby 20.04.2020 19:20

Re: Tax Tips prior to investement
 
Quote:

Originally Posted by ipoddle (Post 3173364)
I'm thinking of putting some money (lets say 100k chf for arguments sake) into some investments (yep, I know that's vague)

Before doing that.. and ignoring pensions and 3rd pillar.. are there any tax tips which mean it's better (from a tax perspective) to put in money in any particular investment type.

Not sure what your investment vehicle is but wealth tax may be something to consider if your intended choice of investment if real estate. Although, Switzerland takes into consideration your entire net worth (including overseas property) for determining the wealth tax rate but foreign property is not taxed.
Hope it helps.

NotAllThere 20.04.2020 19:43

Re: Tax Tips prior to investement
 
Quote:

Originally Posted by fatmanfilms (Post 3173536)
Berkshire Hathaway would be 100% tax efficient as it pays zero dividend & capital gains are tax free...

Not quite 100% - don't forget the wealth tax.

aSwissInTheUS 20.04.2020 20:04

Re: Tax Tips prior to investement
 
Wealth tax? That is in the worst case 0.9% in Basel.

fatmanfilms 20.04.2020 21:08

Re: Tax Tips prior to investement
 
Quote:

Originally Posted by NotAllThere (Post 3173636)
Not quite 100% - don't forget the wealth tax.

Wealth tax is neutral as cash is taxed at an identical rate, so I ignored rather than forgot.
You can also deduct 0.3% for management charges in ZH against taxable income which I doubt can be done with cash in the Bank. This will refund wealth tax on the first few million...... so possibly more tax efficient than holding cash.

PitBull 21.04.2020 19:33

Re: Tax Tips prior to investement
 
Quote:

Originally Posted by ipoddle (Post 3173364)
are there any tax tips which mean it's better (from a tax perspective) to put in money in any particular investment type.

There is an old saying "don't let the tax tail wag the investment dog" - it's not an absolute rule of course, there are always exceptions that can be made, but it's not bad advice - the rationale being the better the investment the less you have to worry about tax anyway.


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