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  #21  
Old 22.11.2020, 21:22
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Re: Uk dividends from own company and Swiss tax

You risk running into UK General Anti Avoidance Regulations. Just as eek says elsewhere.

It's your risk. If you think it's negligible, go for it. There are no clear cut answers. Be prepared to have to defend... And be prepared for the possibility that you might lose.
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Old 22.11.2020, 21:26
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Re: Uk dividends from own company and Swiss tax

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Section 6.2 from this document explain that profits from foreign businesses are exempt

Profits of the business are exempt from personal tax, just like they are in the UK.
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  #23  
Old 22.11.2020, 21:31
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Re: Uk dividends from own company and Swiss tax

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Dividends have preferential treatment in the UK, but carry zero tax credit now, so fully taxable in CH.
If you wind up the company the distribution is a capital gain, that is not chargeable to UK CGT if you stay away for 5 UK tax years & no Swiss Tax payable.

If to was paid in the UK subject to PAYE with the UK 12.5k annual allowance it might be virtually free over several years depending on the amount involved.

This is like deja vu. All the rules are online. It's nigh on impossible these days to liquidate a company and treat so much money as a capital gain. HMRC have cottoned on to it.
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Old 22.11.2020, 21:52
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Re: Uk dividends from own company and Swiss tax

You can only avoid UK tax on dividends as a non-resident if you give up your UK personal allowance so any other income will be be fully UK taxable. The dividend would be an "excluded income" as is mentioned in another recent lengthy thread on exactly the same topic.


You need to declare your share in your company to the Swiss for wealth tax reasons. The calculation is a weighted average of profit and assets and usually results in a lot less than the retained profit. If you sold your shares, who's going to buy them? How does that get you the money?



One dodgy solution is to make the dividend in your first tax year in Switzerland, claim it as excluded income in the UK and 'forget' to mention it to the Swiss, relying on them only asking for end of year statements. Once you've filed a first declaration, any large differences in subsequent filings would be questioned.


The bottom line is you're screwed if you want to do it all above board.
Sure try to find an accountant but you need to also familiarise yourself with the rules.
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Old 22.11.2020, 22:19
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Re: Uk dividends from own company and Swiss tax

From a UK perspective you have to consider whether the transaction is artificial. I.e. there's no commercial reason; it's solely for the avoidance of tax. Of course, it's perfectly proper and above board to arrange you personal taxation to minimise tax, so it's a bit a of a grey area as to what is tax planning and what is avoidance.

An irregular verb.
I plan my tax
You are avoiding tax
He is a tax evader and is extradited to the UK and sent to prison.
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Old 22.11.2020, 22:25
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Re: Uk dividends from own company and Swiss tax

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so it's a bit a of a grey area as to what is tax planning and what is avoidance.
"tax planning" is to find a way to legally avoid paying tax(so is "avoidance"). Finding a way to illegally avoid tax is evasion.

It's not so much of a grey area although those guilty will often say that it is.


As I understand it, evasion is a criminal offence in the UK but not in Switzerland.
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Old 23.11.2020, 00:17
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Re: Uk dividends from own company and Swiss tax

My accountant suggested moving a property from personal name to a ltd name in the Uk purely for tax optimisation purposes. That seems to be common on the Uk yet is not subject to gaar or anything else

Yet selling my shares that I own to another ltd (and lending the new ltd) seems to be frowned upon with allegations of evasion etc

Like I said Id love a few suggestions of tax planning experts to run some of these crazy / smart ideas past
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  #28  
Old 23.11.2020, 01:49
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Re: Uk dividends from own company and Swiss tax

[QUOTE]
My accountant suggested moving a property from personal name to a ltd name in the Uk purely for tax optimisation purposes. That seems to be common on the Uk yet is not subject to gaar or anything else

Yet selling my shares that I own to another ltd (and lending the new ltd) seems to be frowned upon with allegations of evasion etc

Like I said Id love a few suggestions of tax planning experts to run some of these crazy / smart ideas past
[/UNQUOTE]


I feel sure you'll have a CGT liability as soon as you transfer personally owned property to a ltd company but this might be an idea because of the suspected new CGT rules in the UK. Nothing to do with your 250k distribution problem though.

You will no doubt still be the shareholder of that company but the exposure to wealth tax *might* be lower in CH.


Your company with the 250k in it. You sell it for 250k to Company X. Where does company X get the money from? You say you lend it the money. Do you have another 250k to lend them? If you take money out of the original company to lend company X, boom there's your distribution and tax liability. It just doesn't add up and the more convoluted you make it, the worse it would look. If it could be done, everybody would be doing it, including me.



The UK won't allow you to take all the money as a capital gain but it could be that Switzerland does.
The only thing I can think of which might work is If you formally liquidate the company in the UK (you'd need to move the properties first) pay the UK tax however they see it then in Switzerland you could enter it in the Swiss declaration as a sale of shares to the tune of 250k or whatever is left.



You could also make a dividend payment in the UK but file it as a sale of shares in Switzerland. You probably could contrive documents to make this seem legit but it'd surely be classed as evasion if anyone were to find out.
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  #29  
Old 23.11.2020, 09:31
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Re: Uk dividends from own company and Swiss tax

[QUOTE=Landers;3241887]
Quote:
My accountant suggested moving a property from personal name to a ltd name in the Uk purely for tax optimisation purposes. That seems to be common on the Uk yet is not subject to gaar or anything else

Yet selling my shares that I own to another ltd (and lending the new ltd) seems to be frowned upon with allegations of evasion etc

Like I said Id love a few suggestions of tax planning experts to run some of these crazy / smart ideas past
[/UNQUOTE]


I feel sure you'll have a CGT liability as soon as you transfer personally owned property to a ltd company but this might be an idea because of the suspected new CGT rules in the UK. Nothing to do with your 250k distribution problem though.

You will no doubt still be the shareholder of that company but the exposure to wealth tax *might* be lower in CH.


Your company with the 250k in it. You sell it for 250k to Company X. Where does company X get the money from? You say you lend it the money. Do you have another 250k to lend them? If you take money out of the original company to lend company X, boom there's your distribution and tax liability. It just doesn't add up and the more convoluted you make it, the worse it would look. If it could be done, everybody would be doing it, including me.



The UK won't allow you to take all the money as a capital gain but it could be that Switzerland does.
The only thing I can think of which might work is If you formally liquidate the company in the UK (you'd need to move the properties first) pay the UK tax however they see it then in Switzerland you could enter it in the Swiss declaration as a sale of shares to the tune of 250k or whatever is left.



You could also make a dividend payment in the UK but file it as a sale of shares in Switzerland. You probably could contrive documents to make this seem legit but it'd surely be classed as evasion if anyone were to find out.
The company will have to pay corporation tax on any profit from the sale, there ought to be a provision in the accounts already. Then stamp duty +3% on the purchase of the property. I am curious why you don't believe if the company is wound up HMRC would not accept the liquidation as a capital gain.
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  #30  
Old 23.11.2020, 12:06
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Re: Uk dividends from own company and Swiss tax

[QUOTE=fatmanfilms;3241915]
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I am curious why you don't believe if the company is wound up HMRC would not accept the liquidation as a capital gain.

It was in the reply last time this was discussed. I'm not going to go through it again. AFAIK you can only claim up to 20k as a capital gain.
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  #31  
Old 23.11.2020, 12:09
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Re: Uk dividends from own company and Swiss tax

[QUOTE=Landers;3241974]
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It was in the reply last time this was discussed. I'm not going to go through it again. AFAIK you can only claim up to 20k as a capital gain.
Is that per tax payer?
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  #32  
Old 23.11.2020, 12:37
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Re: Uk dividends from own company and Swiss tax

[QUOTE=fatmanfilms;3241975]
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Is that per tax payer?
Per liquidation.
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  #33  
Old 23.11.2020, 12:42
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Re: Uk dividends from own company and Swiss tax

[QUOTE=Landers;3241986]
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Per liquidation.
Thats why people use LPP's & pay income tax in the first place.

At least you can take 35k tax free redundancy payment from the company first.
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  #34  
Old 23.11.2020, 13:54
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Re: Uk dividends from own company and Swiss tax

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"tax planning" is to find a way to legally avoid paying tax(so is "avoidance"). Finding a way to illegally avoid tax is evasion.

It's not so much of a grey area although those guilty will often say that it is
Tax evasion is always wrong since it attracts either civil or criminal penalties. Avoidance either works or doesn't work - that's the grey area.

If you try to avoid tax by exploiting a loophole or some clever accounting or some suchlike, and it doesn't work, then you have to pay interest on the tax you avoided from the date you avoided it. Penalties may also apply in some jurisdictions. E.g. in the UK, if, as a consequence of the avoidance, you missed a statutory deadline.

I'm not suggesting the OP is evading tax, but is suggesting a way of avoiding it, which might be considered artificial. In the UK, where the charge could arise, there is the Ramsay Principle which says that were a set of transactions has no commercial reason, but it solely to avoid tax, the legal approach of HMRC is to tax the the effect of the whole transaction.
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