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Old 24.09.2010, 14:30
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Taxation on Swiss property rental when resident in the UK

Dear all,

I will unfortunately have to return to the UK to work for family reasons. The situation is that I will soon take ownership of a new apartment in Switzerland, that I plan to rent out. My only source of income in Switzerland will be the rental income from my apartment.

Can anyone here advise on how this Swiss rental income will be taxed? Should it be taxed in Switzerland, and does the amount of tax I would pay increase because I would be non-resident? If it is taxed in Switzerland, would I also have to declare my UK income, which would be taxed also in the UK. Alternatively, would the rental income from my Swiss apartment be taxed in the UK together with my other income, but not in Switzerland?

I am aware that there is a double taxation agreement between Switzerland and the UK, but I am not sure how this impacts on my situation.

Thanks in advance.
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Old 24.09.2010, 14:55
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Re: Taxation on Swiss property rental when resident in the UK

I think the answer depends upon whether or not you are classified as being domiciled in the UK. If you are are british citizen and have family, bank accounts and plan on returning there long term in the future then the chances are you are.

If you are working in the UK for a sufficient number of days a year you will be tax resident in the UK. If you are domiciled and tax resident in the UK then the UK can tax you on your worldwide income, i.e. the Swiss rental income will be subject to UK tax. You should receive a tax credit if the rental income is also taxable in the Switzerland. So in effect you are taxed at the higher UK tax rate.

If you are not domiciled in the UK then I do not think they have the UK has a right to tax as the asset from which the income is derived is not situated in the UK.

I could of course be entirely wrong
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Old 24.09.2010, 14:58
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Re: Taxation on Swiss property rental when resident in the UK

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Dear all,

I will unfortunately have to return to the UK to work for family reasons. The situation is that I will soon take ownership of a new apartment in Switzerland, that I plan to rent out. My only source of income in Switzerland will be the rental income from my apartment.

Can anyone here advise on how this Swiss rental income will be taxed? Should it be taxed in Switzerland, and does the amount of tax I would pay increase because I would be non-resident? If it is taxed in Switzerland, would I also have to declare my UK income, which would be taxed also in the UK. Alternatively, would the rental income from my Swiss apartment be taxed in the UK together with my other income, but not in Switzerland?

I am aware that there is a double taxation agreement between Switzerland and the UK, but I am not sure how this impacts on my situation.

Thanks in advance.

http://www.direct.gov.uk/en/MoneyTax...me/DG_10013347
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Old 24.09.2010, 15:05
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Re: Taxation on Swiss property rental when resident in the UK

So I was wrong! Never take advice from an internet forum
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Old 24.09.2010, 15:08
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Re: Taxation on Swiss property rental when resident in the UK

Thank you for your prompt responses. I would be domiciled in the UK, so it looks like I would have to declare any net rental income from my Swiss property when making my UK tax return. It is not clear however, whether I would still have to file a Swiss tax return and pay tax in Switzerland on this rental income.
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Old 24.09.2010, 15:13
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Re: Taxation on Swiss property rental when resident in the UK

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Thank you for your prompt responses. I would be domiciled in the UK, so it looks like I would have to declare any net rental income from my Swiss property when making my UK tax return. It is not clear however, whether I would still have to file a Swiss tax return and pay tax in Switzerland on this rental income.
i have direct experience of the swiss tax system, but normally you'd need to pay tax in the country the property is located in and then also pay tax where you are resident (presumably, the UK).

in the UK you'd get a credit for the tax paid in switzerland so you should end up just paying the same amount of tax as if it was UK income only with double the tax administration.
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Old 24.09.2010, 15:21
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Re: Taxation on Swiss property rental when resident in the UK

Thanks again. Do you know if I would be taxed on the Swiss rental income in Switzerland as if I was a resident in Switzerland, or is there some "special" treatment of this income in Switzerland if I am not resident here?

I will consult a tax advisor when the time arises, but your opinions are greatly appreciated.
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Old 24.09.2010, 15:53
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Re: Taxation on Swiss property rental when resident in the UK

I expect that you would be taxed in Switzerland on income from Swiss real estate, as this is how it works in reverse (if you live in Switzerland and own UK property) under the same tax treaty.

The Swiss tax office might require details of your other income to determine which tax rate to apply, but I don't know about this. (given that they include any income/losses from UK property when calculating the tax rate for a Swiss resident, even though that rental income is not itself taxed in CH)

However, as it is likely that the Swiss tax will be less than the UK tax on the same income, you're likely to be able to use the credits in full, so would not pay any more tax overall than if the property was in the UK.
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Old 24.09.2010, 20:35
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Re: Taxation on Swiss property rental when resident in the UK

On a different note, I am sure that if you are non resident, in certain cantons, you can only let a property out for holiday rentals (short term) and not for any long term continuous period. Might be worth checking out.
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Old 24.09.2010, 21:03
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Re: Taxation on Swiss property rental when resident in the UK

We have to file tax returns for our Swiss rental income in Switzerland. I imagine since you have to report it also in the UK you can deduct that taxes you pay in CH from what you owe (or might owe) in the UK.
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Old 24.09.2010, 21:26
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Re: Taxation on Swiss property rental when resident in the UK

The apartment is in ZH canton, which I think is OK, but wise to check out
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Old 24.09.2010, 21:47
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Re: Taxation on Swiss property rental when resident in the UK

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On a different note, I am sure that if you are non resident, in certain cantons, you can only let a property out for holiday rentals (short term) and not for any long term continuous period. Might be worth checking out.

Erm.... Why did this post deserve a groan Atlanticsailor? I would have been quite grateful if I had this pointed out to me rather than got in trouble later on
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