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Old 28.10.2020, 14:55
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Would i pay Swiss tax for a UK liquidated company?

Hi,

I am just in the process of liquidating my UK limited company and the capital distribution from this will be tax free in the UK.

Just wondering if i will have to declare this on a Swiss tax return and whether i will get hit with a Swiss tax bill for it.

Does anybody have experience of this?

Many thanks
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  #2  
Old 28.10.2020, 15:23
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Re: Would i pay Swiss tax for a UK liquidated company?

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Hi,

I am just in the process of liquidating my UK limited company and the capital distribution from this will be tax free in the UK.

Just wondering if i will have to declare this on a Swiss tax return and whether i will get hit with a Swiss tax bill for it.

Does anybody have experience of this?

Many thanks
You have some unique questions here regarding Swiss taxation. I would recommend that you find a good accountant sooner rather than later, rather than depending on an internet forum to advise you.
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  #3  
Old 28.10.2020, 15:43
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Re: Would i pay Swiss tax for a UK liquidated company?

I think the rules have changed fairly recently. If you were to liquidate following a pre-set process you can/used to be able to declare this as a capital gain.

Otherwise the distribution is treated as a dividend. Taxable in both countries if you choose to be taxed in the UK as a resident. Not taxable in UK if you choose to be taxed as a non-resident however you lose your personal allowance.


I'd have thought the Swiss would follow the UK decision as to whether it's capital gain or dividend but I can't be sure.
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Old 28.10.2020, 16:12
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Re: Would i pay Swiss tax for a UK liquidated company?

If the Swiss consider it a capital gain - which to my mind seems most likely - then you'll only have wealth tax to worry about. Probably.
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Old 28.10.2020, 16:30
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Re: Would i pay Swiss tax for a UK liquidated company?

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If the Swiss consider it a capital gain - which to my mind seems most likely - then you'll only have wealth tax to worry about. Probably.

If it's a simple closing of the copany then in the UK it would be a dividend and should have accompanying documents and certificates. If you've got a dividend certificate it'd be somewhat dodgy to try to claim this as a capital gain in Switzerland however many things can be done without much of a paper trail and probably as long as the numbers stack up at the end of the day you can get away with lots of things.
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Old 28.10.2020, 17:21
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Re: Would i pay Swiss tax for a UK liquidated company?

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Not taxable in UK if you choose to be taxed as a non-resident however you lose your personal allowance.
You don't lose it, it's available for other UK sourced income such as BTL.
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Old 28.10.2020, 19:30
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Re: Would i pay Swiss tax for a UK liquidated company?

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You don't lose it, it's available for other UK sourced income such as BTL.

Not, like I said, when you choose to be taxed as a non-resident. To take advantage of the personal allowance you have to choose to be taxed as UK-resident although in both cases as an actual non-tax-resident foreign income is excluded. There are different rules for taxation of UK dividends depending on which you choose.
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Old 28.10.2020, 19:43
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Re: Would i pay Swiss tax for a UK liquidated company?

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If it's a simple closing of the company then in the UK it would be a dividend.
What about if it's closed via an MVL?
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Old 28.10.2020, 19:48
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Re: Would i pay Swiss tax for a UK liquidated company?

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Not, like I said, when you choose to be taxed as a non-resident. To take advantage of the personal allowance you have to choose to be taxed as UK-resident although in both cases as an actual non-tax-resident foreign income is excluded. There are different rules for taxation of UK dividends depending on which you choose.
No totally incorrect. You can fill in a DT form & choose what specific income you don't wish to be taxable in the UK.
Rents from UK property is always subject to UK tax regardless of residence.

Here is the DT individuall form, you may have to remit the income as mot all countries tax on world wide income.

https://assets.publishing.service.go...Individual.pdf
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What about if it's closed via an MVL?
Thats a distribution of capital on liquidation.
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Old 28.10.2020, 21:05
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Re: Would i pay Swiss tax for a UK liquidated company?

Here are a couple of good links

https://www.crunch.co.uk/knowledge/t...mited-company/
Anything that says "income" or "dividend" would be taxable in Switzerland.

"...However, you need to be aware that distributions from the voluntary liquidation of a company may be subject to income tax under the following circumstances: The company is a ‘Close Company’ (i.e. has five or fewer shareholders) ... The winding up of the company appears to be to reduce tax."

https://propertydivision.co.uk/resid...-uk-dividends/
"....This does, however, lead you to lose your eligibility to the UK personal allowance ...."
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Old 28.10.2020, 21:43
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Re: Would i pay Swiss tax for a UK liquidated company?

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Thats a distribution of capital on liquidation.
Indeed, so CTG. I seem to recall entrepreneur's relief has been abolished, or is about to be.
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Old 29.10.2020, 10:42
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Re: Would i pay Swiss tax for a UK liquidated company?

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Here are a couple of good links

https://www.crunch.co.uk/knowledge/t...mited-company/
Anything that says "income" or "dividend" would be taxable in Switzerland.

"...However, you need to be aware that distributions from the voluntary liquidation of a company may be subject to income tax under the following circumstances: The company is a Close Company (i.e. has five or fewer shareholders) ... The winding up of the company appears to be to reduce tax."

https://propertydivision.co.uk/resid...-uk-dividends/
"....This does, however, lead you to lose your eligibility to the UK personal allowance ...."
It's very rare that profits get left in a close company, clearly if it's an attempt at tax avoidance then it won't work. Dividends would be taxed at 7.5% for a base rate taxpayer, so a non resident / resident could end up with 52,000 of dividends & liable to UK tax of 2812.50 after personal allowance & dividend allowance.
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Old 29.10.2020, 16:05
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Re: Would i pay Swiss tax for a UK liquidated company?

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No totally incorrect. You can fill in a DT form & choose what specific income you don't wish to be taxable in the UK.
Rents from UK property is always subject to UK tax regardless of residence.

Here is the DT individuall form, you may have to remit the income as mot all countries tax on world wide income.

https://assets.publishing.service.go...Individual.pdf


Thats a distribution of capital on liquidation.
Pretty clear to me that British non UK-residents still get the basic allowance for UK sourced income such as BTL

From
https://www.gov.uk/tax-uk-income-liv...onal-allowance

Tax on your UK income if you live abroad

Personal Allowance
You’ll get a Personal Allowance of tax-free UK income each year if any of the following apply:

you hold a British passport

you’re a citizen of a European Economic Area (EEA) country

you’ve worked for the UK government at any time during that tax year

You might also get it if it’s included in the double-taxation agreement between the UK and the country you live in.

Claim the Personal Allowance
If you’re not a UK resident, you have to claim the Personal Allowance at the end of each tax year in which you have UK income. Send form R43 to HM Revenue and Customs (HMRC).
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Old 29.10.2020, 18:02
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Re: Would i pay Swiss tax for a UK liquidated company?

Some more educational material for you.



https://help.iris.co.uk/IRIS/ODL/Pro...ded_income.htm


"Non-resident clients may benefit from an excluded income computation. The tax liability cannot exceed the lower of:
  • The tax that would be paid by a UK resident; or
  • The tax due on the income after ignoring all 'excluded income' and any tax thereon but barring all personal allowances."
So if you receive UK dividends (like when you liquidate a UK company) that you want to be classed as "excluded income" for UK tax purposes you lose your personal allowance on any other income, including for example, rental income.


My non-resident UK tax return software always makes two computations. One as a UK-resident (without foreign income) and one under 'excluded income' (as a non-resident) rules.
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Old 29.10.2020, 20:38
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Re: Would i pay Swiss tax for a UK liquidated company?

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Some more educational material for you.



https://help.iris.co.uk/IRIS/ODL/Pro...ded_income.htm


"Non-resident clients may benefit from an excluded income computation. The tax liability cannot exceed the lower of:
  • The tax that would be paid by a UK resident; or
  • The tax due on the income after ignoring all 'excluded income' and any tax thereon but barring all personal allowances."
So if you receive UK dividends (like when you liquidate a UK company) that you want to be classed as "excluded income" for UK tax purposes you lose your personal allowance on any other income, including for example, rental income.


My non-resident UK tax return software always makes two computations. One as a UK-resident (without foreign income) and one under 'excluded income' (as a non-resident) rules.
Hi Landers - just to clarify - this does not include BTL income? Correct? That's my understanding from https://www.gov.uk/government/public...nt-income-2018

Last edited by HickvonFrick; 29.10.2020 at 21:55.
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Old 29.10.2020, 21:30
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Re: Would i pay Swiss tax for a UK liquidated company?

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Seeing as how we have the most unfriendly man in the world on this thread I'll ask my wife who is a (non-practicing) accountant and see what she says.

Over-reaction much? The information is already there. Your "simple questions" often come across almost as trolling and so for me it's groan-worthy.


Hey I thought I was helping out by providing all the links etc but if people refuse to read them or fail to comprehend I don't have the energy to continue.


If by "BTL income" you mean rental income then no, this cannot be treated as 'excluded income' and if you have no 'excluded income' your personal allowance still stands., However if you're claiming 'excluded income' on investments and you also have rental income then you lose your personal allowance for everything, including that rental income.

Last edited by Landers; 29.10.2020 at 21:36. Reason: I'm the unfriendliest man in the world
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Old 29.10.2020, 22:00
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Re: Would i pay Swiss tax for a UK liquidated company?

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Over-reaction much? The information is already there. Your "simple questions" often come across almost as trolling and so for me it's groan-worthy.


Hey I thought I was helping out by providing all the links etc but if people refuse to read them or fail to comprehend I don't have the energy to continue.


If by "BTL income" you mean rental income then no, this cannot be treated as 'excluded income' and if you have no 'excluded income' your personal allowance still stands., However if you're claiming 'excluded income' on investments and you also have rental income then you lose your personal allowance for everything, including that rental income.
Thanks - that's actually really helpful. It may be easy to you but not so obvious for me as first time expat with basically no background knowledge on taxation!
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Old 29.10.2020, 22:50
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Re: Would i pay Swiss tax for a UK liquidated company?

It can take a while to get your head around it, and then don't forget that you have the Swiss side to consider too.
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