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Old 13.09.2021, 15:27
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Re: Withdrawing pension using mortgage as a passthrough

I assume the same. Note the tax rates seem to be different for withdrawal (applicable to buying a house) vs. witholding tax (leaving the country)

https://finpension.ch/en/capital-wit...-tax-compared/
https://finpension.ch/en/withholding-taxes-pensions/

In addition there would surely be a move of taxes between cantons. If your property is in Geneva but your 2nd pillar fund or Vested Benefits is domiciled in Basel, you ought to pay Geneva withdrawal tax when you buy. When you sell or remortgage and repay the 2nd pillar you would get a credit for Geneva withdrawal tax. If you then leave the country and withdraw you would have to pay withdrawal tax to Basel...would Basel give that up?
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Old 13.09.2021, 15:46
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Re: Withdrawing pension using mortgage as a passthrough

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I assume the same. Note the tax rates seem to be different for withdrawal (applicable to buying a house) vs. witholding tax (leaving the country)

https://finpension.ch/en/capital-wit...-tax-compared/
https://finpension.ch/en/withholding-taxes-pensions/

In addition there would surely be a move of taxes between cantons. If your property is in Geneva but your 2nd pillar fund or Vested Benefits is domiciled in Basel, you ought to pay Geneva withdrawal tax when you buy. When you sell or remortgage and repay the 2nd pillar you would get a credit for Geneva withdrawal tax. If you then leave the country and withdraw you would have to pay withdrawal tax to Basel...would Basel give that up?
You can move the fund to whichever canton has the best deal for the amount involved (it varies based of fund size) if you cash in after leaving CH
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Old 13.09.2021, 15:53
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Re: Withdrawing pension using mortgage as a passthrough

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I assume the same. Note the tax rates seem to be different for withdrawal (applicable to buying a house) vs. witholding tax (leaving the country)

https://finpension.ch/en/capital-wit...-tax-compared/
https://finpension.ch/en/withholding-taxes-pensions/

In addition there would surely be a move of taxes between cantons. If your property is in Geneva but your 2nd pillar fund or Vested Benefits is domiciled in Basel, you ought to pay Geneva withdrawal tax when you buy. When you sell or remortgage and repay the 2nd pillar you would get a credit for Geneva withdrawal tax. If you then leave the country and withdraw you would have to pay withdrawal tax to Basel...would Basel give that up?
That's a great find. I thought the tax rate was the same, so that's already at worst several % points lower than I was expecting. After quite a bit of searching I found the following calculator (use the one at the bottom of the page). Looks like it will be the 4.8% maximum, which is actually quite similar to what it would be if I withdrew in chunks.

https://pensexpert.ch/unsere-loesung...m-kapitalbezug
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Old 13.09.2021, 16:34
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Re: Withdrawing pension using mortgage as a passthrough

So just to be clear. Is the withdrawal tax rate dependant on the pension pot or is it in fact a fixed percentage which is what I thought

How would staggering the withdrawal make much of a difference.

I don’t know how big some pension pits are but mine is 250k which I thought was large. Then again it’s all relative
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Old 13.09.2021, 17:00
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Re: Withdrawing pension using mortgage as a passthrough

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So just to be clear. Is the withdrawal tax rate dependant on the pension pot or is it in fact a fixed percentage which is what I thought

How would staggering the withdrawal make much of a difference.

I don’t know how big some pension pits are but mine is 250k which I thought was large. Then again it’s all relative
It's based on the amount of the pot and for withdrawals when leaving the country is capped at 4.8% in Schwyz. If it is being withdrawn for a house purchase it is a different higher rate. Thanks jim1 once again for clarifying this.

If we work on the incorrect assumption that it is at the same rate as house purchase you could potentially save money by staggering it, because of the way the tax increases.

Using Schwyz as an example, CHF 1m would be taxed at 8.05%. However, if you made the withdrawal in 3 stages you would pay 5.46% each time, saving CHF 26k. However with the 4.8% cap it clearly makes no sense using those numbers.

The annuity conversion rate for my pension fund at 65 is about 5.5% applying that to your CHF 250k pension pot gives an annual income of CHF 13,750. I'll let you judge whether it's a large pot or not.
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  #26  
Old 13.09.2021, 17:02
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Re: Withdrawing pension using mortgage as a passthrough

[In response to LincolnAbrahams]: It varies by canton, the Finpension article I pasted above decribes it for each one.
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Old 13.09.2021, 17:18
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Re: Withdrawing pension using mortgage as a passthrough

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I assume the same. Note the tax rates seem to be different for withdrawal (applicable to buying a house) vs. witholding tax (leaving the country)

https://finpension.ch/en/capital-wit...-tax-compared/
https://finpension.ch/en/withholding-taxes-pensions/

In addition there would surely be a move of taxes between cantons. If your property is in Geneva but your 2nd pillar fund or Vested Benefits is domiciled in Basel, you ought to pay Geneva withdrawal tax when you buy. When you sell or remortgage and repay the 2nd pillar you would get a credit for Geneva withdrawal tax. If you then leave the country and withdraw you would have to pay withdrawal tax to Basel...would Basel give that up?
Good point. I think this is where you will need legal / accounting advice. It can't be particularly uncommon. Finpension might know.
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