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-   -   Buying UK house with Swiss pension: experiences? (https://www.englishforum.ch/finance-banking-taxation/303661-buying-uk-house-swiss-pension-experiences.html)

muze7 15.04.2021 23:51

Buying UK house with Swiss pension: experiences?
 
Hi All,

Over the years there have been a few threads talking about using the Home Ownership promotion that is allowed with pillar 2 pensions on houses outside of Switzerland.

I am in the process of arranging this for a UK house. There were two people on here I could find who managed a while ago (cbb and Magrangs), but it is still very, very tricky as in addition to many forms of evidence, BVG (Chaeis) also wants a UK bank or UK notary to state:


"The undersigned company certifies that he remitted amount by ...BVG will be used within the statutory provisions of home ownership ... or will be refunded in the event of non-fulfillment."

Of course no UK bank or UK notary so far wants to certify this as they cannot want to claim to understand Swiss law.
So did anyone else buying a house in the EU/UK come up against this problem and how did you solve it?


I have found out that Liberty in Schwyz only needs a bank to declare the funds are going straight into a mortgage account, but changing pension funds would be a hassle and we do not have much time.


Many thanks for any practical tips! :)


PS. Note that most people do not now have to jump through these hoops in the UK, as Brexit has made 'compulsary component's' payouts possible but they would still need to in the EU, as many of us would be compulsory insured in the EU, by either working there or sometimes by being insured by just living there. Being insured through work also applies in this case unfortunately, as the person lives in the UK but works remotely in the EU and is insured there. (LOB has confirmed this prevents the easy payout route).

Links to posts about previous success:
https://www.englishforum.ch/finance-...ml#post2184351
https://www.englishforum.ch/1643453-post15.html

ipoddle 16.04.2021 08:39

Re: Buying UK house with Swiss pension: experiences?
 
Just a 'sanity check'.. if you invest money from your pension into a property you can't derive an income from that property.

magic 16.04.2021 08:52

Re: Buying UK house with Swiss pension: experiences?
 
Quote:

Originally Posted by ipoddle (Post 3296832)
Just a 'sanity check'.. if you invest money from your pension into a property you can't derive an income from that property.

Really, what is to stop you buying a place, maybe doing it up and then selling it 12 months down the line?

Phil_MCR 16.04.2021 12:20

Re: Buying UK house with Swiss pension: experiences?
 
Quote:

Originally Posted by magic (Post 3296840)
Really, what is to stop you buying a place, maybe doing it up and then selling it 12 months down the line?

you can do, but you need to repay the pension when you sell.

magic 16.04.2021 12:31

Re: Buying UK house with Swiss pension: experiences?
 
How much tax do you pay in Switzerland for cashing in then, as I am considering moving back to the UK?

Is there a set rate or is it based on your tax for that fiscal year?

newtoswitz 16.04.2021 12:46

Re: Buying UK house with Swiss pension: experiences?
 
To withdraw from your pension the property has to be your primary residence.

So unless you're a cross-border commuter, claiming you have a primary residence outside Switzerland but paying Swiss tax and having a Swiss pension seems likely to cause some problems.

muze7 16.04.2021 16:21

Re: Buying UK house with Swiss pension: experiences?
 
1 Yes, it has to be your primary and only residence. (Which it is). If you have left Switzerland, this is still possible. But in the EU it is very doubtful that it is worth your while, as most EU countries would fully tax you on the withdrawal. The reason it works for the UK is that tax is due in Switzerland because of the tax treaty. The amount depends on the kanton. But if you are in the UK, 99% of people can use the new provisions for withdrawal, much easier! (See my 1st post).

2 If you sell the house, you need to reinvest it in your next primary residence within two years. If you do not, you need to pay it back.

3 Lastly, about renting it out, I think this is possible within the law if you have good reasons (like temporarily moving elsewhere for work, for example).

If people want more details, I can post some links, but many pension funds have these details listed on their website under 'promotion of home ownership'in the vested benefits section.

magic 16.04.2021 16:26

Re: Buying UK house with Swiss pension: experiences?
 
Quote:

Originally Posted by muze7 (Post 3297010)
If people want more details, I can post some links, but many pension funds have these details listed on their website under 'promotion of home ownership'in the vested benefits section.

Please because I might move my pillar 2 when I sign for Chômage/RAV which maybe beneficial as currently it is in a strange Swiss Life QROPS scheme.

muze7 16.04.2021 16:29

Re: Buying UK house with Swiss pension: experiences?
 
https://doc.aeis.ch/docs/pdfs/4153.pdf
https://www.profond.ch/sites/default..._ownership.pdf
https://www.finanzmonitor.com/2-saul...pensionskasse/ this is good if you can read German, lots of answers to faq

But like I said, you probably won't need to! This housebuying withdrawal is truly the hardest route to go down (form wise). If you move to the UK and stop working for a Swiss employer and do not work for any EU employer wither, you can withdraw the pension after 6 months after having left.

fatmanfilms 16.04.2021 16:30

Re: Buying UK house with Swiss pension: experiences?
 
Quote:

Originally Posted by magic (Post 3297012)
Please because I might move my pillar 2 when I sign for Chômage/RAV which maybe beneficial as currently it is in a strange Swiss Life QROPS scheme.

Is that an old UK pension?

magic 16.04.2021 16:44

Re: Buying UK house with Swiss pension: experiences?
 
Quote:

Originally Posted by fatmanfilms (Post 3297016)
Is that an old UK pension?

No it is the one provided by my employer here in Switzerland, it seems quite rare now.

HickvonFrick 16.04.2021 18:01

Re: Buying UK house with Swiss pension: experiences?
 
Quote:

Originally Posted by magic (Post 3296926)
How much tax do you pay in Switzerland for cashing in then, as I am considering moving back to the UK?

Is there a set rate or is it based on your tax for that fiscal year?

Depends on canton where the fund is held. With this in mind, my recommendation would be to move to ValuPension, which is based in low tax Schwyz and has the best product range in any case. (I think the tax rate may depend on how big your pot is, but in Schwyz will be very low anyway - single figures)


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