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Old 21.04.2020, 15:58
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Moving to UK - tax planning

Iím moving to UK for a few years for a lucrative finance job and want to optimally plan my exit from Switzerland and UK/CH taxes to save money.

As we all know, Switzerland doesnít tax capital gains, which is very nice for savers. But most countries in the world do and UK is no exception. However, they have this concept of domiciled and non-domiciled residents. People without strong ties to UK (especially for whatever reason, having a non-UK father counts a lot) and not planning to stay in the UK indefinitely can elect to declare themself non-domiciled. That gives the option to be taxed on remittance basis: instead of being taxed on worldwide income and capital gains, they are taxed only on UK income/gains and the part of foreign income/gains remitted into the UK.

Iíd like to take advantage of this favorable remittance-basis taxation scheme. Does anyone have experience with it? How difficult is it to manage and what are the gotchas?

I have accounts at Interactive Brokers and Schwab, formally both with their UK entities - is the money in them considered to be remitted into the UK? IB claims to hold customer assets with their US entity, so hopefully not, but on the other hand when depositing CHF they ask to wire it into their UK bank account - would this be a remittance event? Also should I avoid buying UK stocks and funds at IB to avoid remittance problems?

Another question I have is about pillar 2 withdrawal. Iíll move my pillar 2 to Schwyz before leaving and have it cashed out when Iím in the UK. How is the withdrawal taxed from UK perspective?

Thanks for any replies!
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Old 21.04.2020, 16:04
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Re: Moving to UK - tax planning

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Iím moving to UK for a few years for a lucrative finance job and want to optimally plan my exit from Switzerland and UK/CH taxes to save money.

As we all know, Switzerland doesnít tax capital gains, which is very nice for savers. But most countries in the world do and UK is no exception. However, they have this concept of domiciled and non-domiciled residents. People without strong ties to UK (especially for whatever reason, having a non-UK father counts a lot) and not planning to stay in the UK indefinitely can elect to declare themself non-domiciled. That gives the option to be taxed on remittance basis: instead of being taxed on worldwide income and capital gains, they are taxed only on UK income/gains and the part of foreign income/gains remitted into the UK.

Iíd like to take advantage of this favorable remittance-basis taxation scheme. Does anyone have experience with it? How difficult is it to manage and what are the gotchas?

I have accounts at Interactive Brokers and Schwab, formally both with their UK entities - is the money in them considered to be remitted into the UK? IB claims to hold customer assets with their US entity, so hopefully not, but on the other hand when depositing CHF they ask to wire it into their UK bank account - would this be a remittance event? Also should I avoid buying UK stocks and funds at IB to avoid remittance problems?

Another question I have is about pillar 2 withdrawal. Iíll move my pillar 2 to Schwyz before leaving and have it cashed out when Iím in the UK. How is the withdrawal taxed from UK perspective?

Thanks for any replies!
Non Dom taxation gets expensive quite quickly, you should definitely cash in all your investments & then reinvest the following day. Once you are UK resident you can not hold the same investments for 30 days to get a new CGT base value.

Unless the second pillar is 'disguised remuneration' you should only have to pay Swiss withholding tax. You can only cash it out in full if you are not working & after 6 months UK residence.
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Old 21.04.2020, 16:12
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Re: Moving to UK - tax planning

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Non Dom taxation gets expensive quite quickly
As far as I can find online, it only gets really expensive (like 30k/year) after spending 7 years in the UK. I probably wouldn't stay that long there. Until then it only costs the loss of some tax allowances which I can live with.

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you should definitely cash in all your investments & then reinvest the following day. Once you are UK resident you can not hold the same investments for 30 days to get a new CGT base value.
But selling on my last day in CH and re-buying the same stuff the next day in UK would be ok and resets my cost basis?

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Unless the second pillar is 'disguised remuneration' you should only have to pay Swiss withholding tax. You can only cash it out in full if you are not working & after 6 months UK residence.
Hmm, I'm a non-EU person and I thought I'd able to cash it out fully (or at least the non-mandatory part) the moment I leave Switzerland, regardless of whether I'll continue working or not. Is it not the case really?
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Old 21.04.2020, 16:28
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Re: Moving to UK - tax planning

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But selling on my last day in CH and re-buying the same stuff the next day in UK would be ok and resets my cost basis?

Hmm, I'm a non-EU person and I thought I'd able to cash it out fully (or at least the non-mandatory part) the moment I leave Switzerland, regardless of whether I'll continue working or not. Is it not the case really?
No, you should repurchase whilst still Swiss resident otherwise you need to wait 30 days, of course you could choose a similar investment without issue.

The non mandatory part yes, however I suspect you need to be resident in the UK for 6 months first.

All my relevant notes & paperwork are in another country, it was a few days googling so can't give you any links.
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