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Old 11.08.2020, 12:11
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Tax advice please

Hi Everyone, I am new to this site so please forgive me if what I asking has been covered before.
I am British and a UK domicile my wife is also British but for the last 10 years has been Swiss domicile and works for Swiss airlines on a part time (50%) contract. We have been married for one year. We tend to travel around quite a bit between UK and Spain. Up until last year she was renting an apartment in Zurich, but then it was taken back by the owners for renovations and everyone had to move out. Since then she has been commuting to work from either UK or Spain. She wants to remain as domiciled Swiss as she was on a C permit. But is now finding it to be impossible without a permanent address. The other alternative to this is becoming a German domicile as she has a flat in her name in Berlin as her father has property there. At present the tax implications are negligible because she only earns a small salary. But in the future her father is incorporating a large property business in Germany between his 8 children (85 million euro value) of which will be earning a wage and dividends (this is a few years away). My questions are these:
1. Does anybody know a good tax advisor who deals with Swiss, German and possible UK affairs?
2. Is it possible to remain a Swiss resident without an address?(probably not, right?)
3. Are there tax benefits of being a Swiss domicile over being a German one (or maybe even a UK one) worth the amount of renting a Swiss base which we probably would not use that much just to maintain the C permit and possibly a Swiss passport?
4. Can a married couple have different domiciles according to Swiss law?

Thank you for any help!
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Old 13.08.2020, 20:01
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Re: Tax advice please

Domicile and residency can be different things and can be defined differently in different countries. Generally speaking though "domicile" is where the center of your life is.
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Old 13.08.2020, 20:21
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Re: Tax advice please

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Hi Everyone, I am new to this site so please forgive me if what I asking has been covered before.
I am British and a UK domicile my wife is also British but for the last 10 years has been Swiss domicile and works for Swiss airlines on a part time (50%) contract. We have been married for one year. We tend to travel around quite a bit between UK and Spain. Up until last year she was renting an apartment in Zurich, but then it was taken back by the owners for renovations and everyone had to move out. Since then she has been commuting to work from either UK or Spain. She wants to remain as domiciled Swiss as she was on a C permit. But is now finding it to be impossible without a permanent address. The other alternative to this is becoming a German domicile as she has a flat in her name in Berlin as her father has property there. At present the tax implications are negligible because she only earns a small salary. But in the future her father is incorporating a large property business in Germany between his 8 children (85 million euro value) of which will be earning a wage and dividends (this is a few years away). My questions are these:
1. Does anybody know a good tax advisor who deals with Swiss, German and possible UK affairs?
2. Is it possible to remain a Swiss resident without an address?(probably not, right?)
3. Are there tax benefits of being a Swiss domicile over being a German one (or maybe even a UK one) worth the amount of renting a Swiss base which we probably would not use that much just to maintain the C permit and possibly a Swiss passport?
4. Can a married couple have different domiciles according to Swiss law?

Thank you for any help!
With those amounts of money and the complexity of the issue I'd be taking legal advice. My 2p:

If you are in the UK, and given her nationality there's at least a good possibility she would be deemed to have UK domicile absent a clear employment AND residence in another country (i.e. if she no longer maintains a Swiss address). Given shes a pilot, the employment may deemed to not be (as) important in determining domicile as the address. As such, I think maintaining a property in Switzerland is likely to be important. But yes - ask someone who is an expert in this area, these are just points to consider.

With those sums I'd be making sure she has Swiss domicile as the tax situation is likely to be far more favourable. Even if that means getting somewhere further from Zurich. Especially if she has a C permit - would be a shame to lose it, especially as she may not be able to come back after the brexit transition period if she doesn't have German nationality too.

Are you not tempted to come over and live here? It would seem to solve a lot of problems.
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Old 13.08.2020, 20:55
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Re: Tax advice please

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With those amounts of money and the complexity of the issue I'd be taking legal advice. My 2p:

If you are in the UK, and given her nationality there's at least a good possibility she would be deemed to have UK domicile absent a clear employment AND residence in another country (i.e. if she no longer maintains a Swiss address). Given shes a pilot, the employment may deemed to not be (as) important in determining domicile as the address. As such, I think maintaining a property in Switzerland is likely to be important. But yes - ask someone who is an expert in this area, these are just points to consider.

With those sums I'd be making sure she has Swiss domicile as the tax situation is likely to be far more favourable. Even if that means getting somewhere further from Zurich. Especially if she has a C permit - would be a shame to lose it, especially as she may not be able to come back after the brexit transition period if she doesn't have German nationality too.

Are you not tempted to come over and live here? It would seem to solve a lot of problems.
Losing UK domicile takes about 20 years, assuming you do not change country of residence, if you do, the clock resets. However this is to do with residence, which confusingly has the same meaning as Domicile in French.

The statutory definition of UK residence has been law for a few years, just follow the flow charts as far as UK tax residence goes, less than 16 days at midnight is conclusively non residence, more days than that it depends on your connections with the U.K. Less than 45 days or 90 days will be required by most Brits who recently work in the UK & has accommodation available or family members who live in the UK (Partner/Children)(Available accommodation can be a relations home or a Hotel that you spent more than about a couple of weeks in over the year)

Deemed Domicile is completely different & only applicable to non UK born foreign citizens (& their fathers not uk born), Non Doms after living in the UK for 17 years become deemed domicile for taxation purposes & can no longer choose to be taxed on just remitted income & are liable to taxation on worldwide income & gains like everyone else. This is the reason that London is the residence of choice for foreign Billionaires, it's a tax haven.
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Old 13.08.2020, 21:10
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Re: Tax advice please

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4. Can a married couple have different domiciles according to Swiss law?
Yes.

Tom
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Old 13.08.2020, 21:24
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Re: Tax advice please

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Yes.

Tom

What he said. I'm in Switzerland with my B permit, the Lovely Missus is in the UK.


Regards




Ian
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Old 13.08.2020, 22:01
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Re: Tax advice please

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Losing UK domicile takes about 20 years, assuming you do not change country of residence, if you do, the clock resets. However this is to do with residence, which confusingly has the same meaning as Domicile in French..
I remember being told it was 16 years.

ETA: Content removed because I can't be bothered to facing the EF jury of "I know better and need to show the world".

Last edited by Kittster; 13.08.2020 at 22:43.
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Old 13.08.2020, 22:10
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Re: Tax advice please

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I remember being told it was 16 years.

OP: An experienced Swiss tax advisor from a Big 4 would charge between 400 and 500 Francs per hour to provide you with the advice you are after. You would get a proper opinion that can be relied upon for your specific case rather than what people on the internet assume based on generalities. Cheaper options are likely available but I worked for a Big 4 department dealing with such questions for almost 15 years so that is the pricing that I know.
It's not actually written in law, however writing a post card to a friend saying 'you missed the UK' would prevent you from losing UK domicile as clearly your leaving was not definitive as you might want to return.

TBH they would need to take councils opinion, which would cost significantly more than 400 an hour, as you know UK law is not codified.
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Old 13.08.2020, 22:12
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Re: Tax advice please

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I remember being told it was 16 years.

OP: An experienced Swiss tax advisor from a Big 4 would charge between 400 and 500 Francs per hour to provide you with the advice you are after. You would get a proper opinion that can be relied upon for your specific cas
And the person who told you this was an experienced Swiss tax advisor from one of the big 4?

We had one of the Big 4 dealing with my staff's tax issues as they roamed around Europe. They were as likely to screw up royally as anyone else. They're not reassuringly expensive (and neither is Stella Artois).
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Old 13.08.2020, 22:41
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Re: Tax advice please

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And the person who told you this was an experienced Swiss tax advisor from one of the big 4?

We had one of the Big 4 dealing with my staff's tax issues as they roamed around Europe. They were as likely to screw up royally as anyone else. They're not reassuringly expensive (and neither is Stella Artois).
Ah yes, we are once again being unnecessarily uncivil. Would you like me to leave too? You and the other few usual suspects are certainly doing a Stella job at making posting an exercise in trying to cover all possible uncharitable interpretations possible. So why don't I just delete the post so you can feel like you were right and bullied me into silence, ok? Grand.
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Old 14.08.2020, 09:57
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Ah yes, we are once again being unnecessarily uncivil...
Say whut? I wasn't intending to be uncivil (necessarily or otherwise). And no - I don't want you to leave. Or stay. I don't know you.

Just wishing to point out that that someone working for one of the Big 4, recommending that you use someone working for the one of the Big 4 is hardly impartial. To paraphrase Mandy Rice-Davies "Well, they would, wouldn't they".
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Old 14.08.2020, 10:22
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Re: Tax advice please

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Ah yes, we are once again being unnecessarily uncivil. Would you like me to leave too? You and the other few usual suspects are certainly doing a Stella job at making posting an exercise in trying to cover all possible uncharitable interpretations possible. So why don't I just delete the post so you can feel like you were right and bullied me into silence, ok? Grand.
I feel you are being unnecessarily sensitive here.

The fact is banks are there to make money first and actually helping customers comes way down the list. I have yet to receive any advice from a bank that was not primarily in the bank's interest and what they advised was often incorrect or incomplete - and I've been banking for over 50 years now...
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Old 14.08.2020, 10:58
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Re: Tax advice please

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Just wishing to point out that that someone working for one of the Big 4, recommending that you use someone working for the one of the Big 4 is hardly impartial. To paraphrase Mandy Rice-Davies "Well, they would, wouldn't they".
I don't work for them anymore, otherwise I would have simply said "I work for a Big 4 and this is what the advice would cost".


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I feel you are being unnecessarily sensitive here.

The fact is banks are there to make money first and actually helping customers comes way down the list. I have yet to receive any advice from a bank that was not primarily in the bank's interest and what they advised was often incorrect or incomplete - and I've been banking for over 50 years now...
I also don't work for a bank and if you are seeking tax advice from a banker, you are barking up the wrong tree in Switzerland because they are not allowed to provide it. That was actually a bit of a problem when my former boss tried to explain the concept of providing investment advice based on after-tax returns. The general feeling was that it was up to the customer to figure it out and unless they could basically enter the product in a database and have it automatically spit out the after-tax info, they didn't want the hassle of checking.

The habit to pull apart posts as if you were reviewing a doctoral thesis is getting seriously tedious. In the past few months I have often started to write an answer to a question or a response to someone needing support but then deleted it again because I didn't feel like re-reading it three times and making multiple amendments in order to try to avoid the "nitpick squad". Furthermore, even if you do make a carefully worded post, it sometimes still ends up being pulled apart and turned into the projection space for some people's unresolved issues. There used to be people around who would counterbalance this nonsense but most of them have decided that there are better ways to use their time.

It is fair enough to call out someone making wrong or outright offensive statements but in this case, I a) stated what I knew to be true and b) indicated that there were other options but that I was not familiar with them. I did not suggest that they take that particular option, heck, I didn't even specify which company, so the idea that I was just trying to generate business is simply ludicrous. What I did suggest and still strongly advise they do is to seek a proper opinion rather than getting freebie advice.
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Old 14.08.2020, 11:13
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Re: Tax advice please

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We had one of the Big 4 dealing with my staff's tax issues as they roamed around Europe. They were as likely to screw up royally as anyone else. They're not reassuringly expensive (and neither is Stella Artois).
as an ex-big-4 tax adviser, i would advise against using the big 4 for personal tax except in certain limited circumstances. the processes and cost structures mean that for standard personal tax, they are little more than a processing factory with very little capacity/incentive to deal with non-standard cases.

i just had to fix the personal tax returns for someone which got royally messed up by them costing >$10k in additional tax on a $130k salary.

the only time i saw it made sense was if you had a vanilla return (where they just push it through the factory with no added value) or you had >$100m net worth and you had combined personal and business tax planning (and we were billing >>$100k per month for tax advice).
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Old 14.08.2020, 14:55
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Re: Tax advice please

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as an ex-big-4 tax adviser, i would advise against using the big 4 for personal tax except in certain limited circumstances. the processes and cost structures mean that for standard personal tax, they are little more than a processing factory with very little capacity/incentive to deal with non-standard cases.

i just had to fix the personal tax returns for someone which got royally messed up by them costing >$10k in additional tax on a $130k salary.

the only time i saw it made sense was if you had a vanilla return (where they just push it through the factory with no added value) or you had >$100m net worth and you had combined personal and business tax planning (and we were billing >>$100k per year for tax advice).
What Phil said. I had my taxes allegedly done by a big four twice as part of a job move package. What it means is that you have to give the same information you would normally fill into your cantonal tax system... but instead they force you to use their own system which is in every imaginable way worse. Then they will refill it and file it for you. Not just no added value at all but even worse for me than doing it on my own.
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Old 14.08.2020, 17:23
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Re: Tax advice please

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But is now finding it to be impossible without a permanent address.
A permit lapses automatically if the person has been out of the country for more than six months, if found out. It may be possible for her to get her C back if it lapses, but why take that risk and hassle...

Since she wants to keep the permit, IMHO she should get a place to sleep immediately, even an AirBnB or hotel would do, and change her address to that officially. She can officially change it as often and as frequently as she wants, though if the total time where she had no address here after her moving out is longer than 6 months she may want to proritise avoiding waking up sleeping dogs and move as little as possible.
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Old 15.08.2020, 11:04
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Re: Tax advice please

The C-permit is linked to being resident in Switzerland. That means having some kind of address, which can broadly be anything, from a small sublet room, to a c/o address with a friend. Generally the authorities are not going to check how often you are actually there.
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Old 15.08.2020, 12:45
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Re: Tax advice please

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The C-permit is linked to being resident in Switzerland. That means having some kind of address, which can broadly be anything, from a small sublet room, to a c/o address with a friend. Generally the authorities are not going to check how often you are actually there.
It helps to read OP's post, he says the lease ended last year, obviously that means no address for more than half a year. If landlords in Zürich are required to inform the authorities about its end there's a problem, and even if not there's still a risk.
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