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Old 04.10.2020, 19:37
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UK citizen just moved in Switzerland - How to best go about taxes?

Hello,

I moved to Switzerland at the beginning of September 2020 following a permanent job offer. Originally my wife and I agreed to both move here. Now our situation is about to change so my wife and kids can not longer move here. We have 3 children, our own house and a rental property.
I am renting here and paying mortgage etc in UK. However, I am being told that the attractive salary I thought I was getting could perish if I am not careful about the residency status.

Can anyone help me understand how to best go about?

Thanks!
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Old 05.10.2020, 00:37
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Re: UK citizen just moved in Switzerland - How to best go about taxes?

Contact your Kanton income tax department (Steueramt from your Kanton) directly, make an appointment directly with a specialist, they will advise what is best for you. You will have to be patient, the specialist behind the counter may not have all the information the first time and will need a few days to return to you.
I am also sure that other people at the English Forum will come back to you with their own experience.

Last edited by JSOU; 05.10.2020 at 01:13.
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Old 05.10.2020, 07:54
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Re: UK citizen just moved in Switzerland - How to best go about taxes?

You have tax residency in Switzerland. That's really unlike to change. (Your residency permit won't be affected, though you might change tax band!). Whether you're tax resident in the UK comes down to us how many days you spend in the UK and how many ties you have to the UK.

Check here: https://www.expertsforexpats.com/exp...esidence-test/

A flow diagram here: https://assets.kpmg/content/dam/kpmg...-flowchart.pdf

And a discussion concerning the nature of "a day". https://uk.andersen.com/the-uk-statu...esidency-test/

Eventually, you might find that according to the rules. you're tax resident in both countries. I've heard recently that in such situations, there's a few tie breakers to decide tax residency, but I haven't been able to find any information about it.
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Old 05.10.2020, 08:27
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Re: UK citizen just moved in Switzerland - How to best go about taxes?

Check the Doppelbesteuerungsabkommen (double taxation agreement) between CH and the UK.
This will give you all the rules. Here is the German one, you will find the English version with the information given there https://www.admin.ch/opc/de/classifi...291/index.html
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Old 05.10.2020, 08:46
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Re: UK citizen just moved in Switzerland - How to best go about taxes?

As NAT said, you are CH tax resident. You need to comply with CH tax rules (declaring world wide income, so that rental property for instance).
Are you also UK tax resident? Check out the HMRC website concerning the Statutory Residence Test.
There is a DTA between CH and UK, so tax paid in CH will be offset against your UK liability.


Don't tell me you settled in Allschwil because the realator said the tax was less than BS?
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Old 05.10.2020, 12:27
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Re: UK citizen just moved in Switzerland - How to best go about taxes?

The question asks about "residency status" so could be about the type of permit (but I suspect is more about tax) A friend of mine works 4 days a week in Switzerland and one day in Belgium. He's in Belgium enough that by UK rules he would be tax resident there but pays zero tax in Belgium. He has a B permit. There's no such agreement with the UK is there? (I didn't think so). It's just the statutory residency test which applies (which changed a number of years back so it's more black and white now, rather than grey before)


I would suppose that from the UK point of view, if you're tax resident there and working here, that only UK Income tax would be due and not national insurance so it might not be too bad. If you negotiated a good rate then that attractive Swiss salary might still be good when compared with the UK, however you'll have the hassle of travelling (potentially quarantine), accommodation and living costs which you can't make tax deductions for, at least in Switzerland.
All your income and wealth(including UK company shareholdings) is taxable either directly(like dividends) or indirectly(like rental income and use of own home) in Switzerland.
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Old 05.10.2020, 17:41
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Re: UK citizen just moved in Switzerland - How to best go about taxes?

If your family are not moving to CH with you, and if you retain the family home in the UK, you might find yourself in a bit of a dual tax pickle. In the last 6 years the HRMC have really been cracking down on Brits who earn high incomes in low tax countries (Switzerland included) and try to get UK tax relief through claiming non-residency status...

https://www.gov.uk/tax-foreign-income/residence#:~:text=You're%20automatically%20non%2Dr esident,than%2030%20were%20spent%20working

Definitely start keeping a spreadsheet of what days you spend in what location and keep your travel receipts/flight tickets!

In Switzerland, find yourself an English speaking truehand (accountant) - possibly something your new employer can help you with?
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Old 05.10.2020, 17:54
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Re: UK citizen just moved in Switzerland - How to best go about taxes?

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In Switzerland, find yourself an English speaking truehand (accountant) - possibly something your new employer can help you with?

I'd be surprised if he keeps his 'center of life' in the UK (kids, wife, house, business) that he'll get away with non-resident.
Also (I thought) you have to be out of the UK for a full tax year first. So that's until April 2022.

But anyway, an accountant is not a tax advisor, I'm not even sure they'd give tax enhancement advice.
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Old 05.10.2020, 17:59
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Re: UK citizen just moved in Switzerland - How to best go about taxes?

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...cracking down on Brits who earn high incomes in low tax countries (Switzerland included) and try to get UK tax relief through claiming non-residency status...

you mean "to avoid paying UK tax". "Tax relief" has a specific (different) meaning.
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Old 05.10.2020, 18:02
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Re: UK citizen just moved in Switzerland - How to best go about taxes?

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I'd be surprised if he keeps his 'center of life' in the UK (kids, wife, house, business) that he'll get away with non-resident.
Also (I thought) you have to be out of the UK for a full tax year first. So that's until April 2022.

But anyway, an accountant is not a tax advisor, I'm not even sure they'd give tax enhancement advice.



Just like the Swiss "accountants" who probably don't know UK rules, please refrain from posting stuff if you don't know.
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Old 05.10.2020, 18:31
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Re: UK citizen just moved in Switzerland - How to best go about taxes?

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Just like the Swiss "accountants" who probably don't know UK rules, please refrain from posting stuff if you don't know.
Thanks for the advice.
However an earlier post of yours contains the following words:
"could, I suspect, is there?, I would suppose, it might, might"
So, hardly conclusive you're an expert yourself.
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  #12  
Old 05.10.2020, 18:36
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Re: UK citizen just moved in Switzerland - How to best go about taxes?

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We have 3 children, our own house and a rental property.
I've highlighted the crucial bit.

As you are working and living in Switzerland, you're liable for tax here.
As you own a rental property in the UK, you're also liable for tax there on the income generated by that property.

I'm no expert on the residency part, but once you get that cleared up and have secured your Swiss residency, be sure that you're liable for tax in both countries. I'm liable for tax in both as I own a rental property in the UK.
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Old 05.10.2020, 19:34
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Re: UK citizen just moved in Switzerland - How to best go about taxes?

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I've highlighted the crucial bit.

As you are working and living in Switzerland, you're liable for tax here.
As you own a rental property in the UK, you're also liable for tax there on the income generated by that property.

I'm no expert on the residency part, but once you get that cleared up and have secured your Swiss residency, be sure that you're liable for tax in both countries. I'm liable for tax in both as I own a rental property in the UK.
UK rental income & capital gains taxable in the U.K. Due to personal allowances little tax may be payable, however further Swiss tax could be payable on the income. The Swiss will allow for full deductions on interest, only at base rate in the UK.
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Old 05.10.2020, 19:40
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Re: UK citizen just moved in Switzerland - How to best go about taxes?

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Also (I thought) you have to be out of the UK for a full tax year first. So that's until April 2022.
It used to be like that, but last time I checked, you can avail yourself of split year treatment.
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Old 05.10.2020, 19:46
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Re: UK citizen just moved in Switzerland - How to best go about taxes?

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It used to be like that, but last time I checked, you can avail yourself of split year treatment.
You can, however if you return to the UK without being abroad for 1 full tax year you are liable to UK taxes throughout.
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Old 05.10.2020, 20:51
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Re: UK citizen just moved in Switzerland - How to best go about taxes?

So much false or out-dated information on this thread, and a lot of others. I think I'm out. Everyone's a troll as far as I'm concerned.
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Old 05.10.2020, 21:26
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Re: UK citizen just moved in Switzerland - How to best go about taxes?

I want to avoid poking FMF's ire if I can, (as whilst we seem to mostly agree we also disagree) but there are several other threads on here about this and similar situations. Example: this one goes into tax issues later on: https://www.englishforum.ch/finance-...companies.html

If your wife, family and family home remain in the UK; if you have a rental property there; even though you may be taxed at source in Switzerland and the Swiss get first dibs on your tax money - it is HIGHLY LIKELY you will be expected to pay taxes in the UK as well.

Yes, there's a dual tax treaty. No, it doesn't mean you will save money on tax overall, but it (usually) helps keep the tax burden down

It is VITAL to count your UK days if you are to try and avoid being taxed there as well. And get professional advice in both countries, which is not easy to find.

The HMRC website does give a lot of useful information, but you will probably read it and weep. eg:

www.gov.uk/tax-uk-income-live-abroad
www.gov.uk/tax-uk-income-live-abroad/taxed-twice
https://www.gov.uk/government/public...d-tax-treaties



Kind regards






Ian


PS. Our situations seem similar. My wife lives in the UK; we also own rental properties there; I work full time here for a Swiss company. We don't have kids though.
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Old 06.10.2020, 10:36
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Re: UK citizen just moved in Switzerland - How to best go about taxes?

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Also (I thought) you have to be out of the UK for a full tax year first. So that's until April 2022.

But anyway, an accountant is not a tax advisor, I'm not even sure they'd give tax enhancement advice.
Def don't need to be away from the UK for a full tax year - I moved to CH mid year and was granted immediate non residency status within the UK. I still pay full tax to the HRMC on my UK rental properties but they also have clear guidelines on how my non residency would be affected if I stayed in the UK house I used to live in especially given I have family in it now, or in any of my other rentals, and how long I can stay in the UK each year for pleasure/business.

In Switzerland, my UK property values, rental income & costs and UK bank account values are all taken into account when determining CH income and wealth taxes.

Both of my truehands in CH have had multi jurisdictional knowledge and have been excellent tax advisors for my particular circumstances, not just local Kantonal book-keeping tax accountants. And for those with more complicated situations, there's also the option of the BDO types of firms, albeit they come with a hefty price tag (which is one of the reasons I swapped out).

Out of sheer curiousity OP, why are your family now not moving to CH? I did the commute between the 2 countries for 3 years prior to moving permanently here - it was a novelty at first, but that quickly became tiring and quite a hassle, and was such a relief when I could slash the costs (and effort) of maintaining 2 homes.
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Old 06.10.2020, 10:55
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Re: UK citizen just moved in Switzerland - How to best go about taxes?

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So much false or out-dated information on this thread, and a lot of others. I think I'm out. Everyone's a troll as far as I'm concerned.
From https://www.gov.uk/tax-right-retire-abroad-return-to-uk

You must tell HM Revenue and Customs (HMRC) if you’re either:

leaving the UK to live abroad permanently
going to work abroad full-time for at least one full tax year
The tax year runs from 6 April to 5 April the next year.

So clearly being away for at least 1 full tax year & working full time is important.

Automatic overseas test :-

An individual will be automatically non-resident if they:

Were UK resident in at least one of the previous three UK tax years, but spend less than 16 days in the UK and do not die in the tax year; or
Were non UK resident in all of the three preceding tax years and spend less than 46 days in the UK in the years; or
Leave the UK to carry out full time work abroad, spend less than 90 days in the UK and no more than 31 days working in the UK; or
Die in the year having spent less than 46 days in the UK and were not UK resident in either of the two preceding tax years.

Having a family & a home in the UK is not an issue providing you Leave the UK to carry out full time work abroad, spend less than 90 days in the UK and no more than 31 days working in the UK
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Def don't need to be away from the UK for a full tax year - I moved to CH mid year and was granted immediate non residency status within the UK. I still pay full tax to the HRMC on my UK rental properties but they also have clear guidelines on how my non residency would be affected if I stayed in the UK house I used to live in especially given I have family in it now, or in any of my other rentals, and how long I can stay in the UK each year for pleasure/business.
However if you return to the UK without spending a full tax year abroad, you will be liable to tax on your Swiss salary in the UK.
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Old 06.10.2020, 20:34
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Re: UK citizen just moved in Switzerland - How to best go about taxes?

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Having a family & a home in the UK is not an issue providing you Leave the UK to carry out full time work abroad, spend less than 90 days in the UK and no more than 31 days working in the UK

Practically, given your situation, this is the difficult bit: spend less than 90 days in the UK.



You have to prove it, too.


Good luck!


Kind regards




Ian
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