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Old 20.02.2007, 00:31
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Thinking of retiring to Switzerland

Hi everyone, I 've been holidaying in Switzerland for the past 25 years. In 12 months time I retire from the police in the UK. I am also a director of a company and should have over 55,000 per year coming in from the UK. I am seriously thinking of selling my 350.000 house in the UK, and buying a house somewhere around Thun. I may use my 100.000 lump sum + mortgage to buy some terraced houses in Cheshire to rent out to give me some more income and to keep some capital should I wish to move back to the UK when I get much older.

We plan to spend about 6 months of the year in Switzerland, and will travel in our caravan around Europe and the UK for the rest of the time.

Should I buy in Switzerland as a resident, and if I do what will be my tax position (bearing in mind all my income will be taxed in the UK) and how much will I have to pay for Health Insurance?

Or could I have the house as a holiday home and use UK travel insurance (2 years for a couple for European travel at 650 total) to cover our travels around Europe?

I realise this covers a lot of issues, but I'm not sure where to start. Any help would be gratefully received.
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Old 20.02.2007, 01:04
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Re: Thinking of retiring to Switzerland

Woops, just read the Intro rules ... better start again! My family have been coming to Switzerland most years for the past 25 years, as a result of reading the book "Railway Holidays in Switzerland". First trip blew me away, the scenery, the lovely towns, Rosti, walking across Alpine meadows, and the trains. At first we came in a tent and later in our caravan. This year we came for a long weekend in Winter, just to see the difference, and loved that too. Our favourite area in Lake Thun, and we particularly like Aeschi and Krattigen. Why don't we retire in the UK? Why live in the UK with its terrible congestion, outrageous house prices to live anywhere worth living, criminal or antisocial kids on virtually every corner. OK I will have to improve my German and my wife will have to learn it. Health care could be expensive. Other than that, I can't think of many minuses. Everytime I return here I just breath in the air and think "Home".
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Old 20.02.2007, 08:27
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Re: Thinking of retiring to Switzerland

Quote:
Hi everyone, I 've been holidaying in Switzerland for the past 25 years. In 12 months time I retire from the police in the UK. I am also a director of a company and should have over 55,000 per year coming in from the UK. I am seriously thinking of selling my 350.000 house in the UK, and buying a house somewhere around Thun. I may use my 100.000 lump sum + mortgage to buy some terraced houses in Cheshire to rent out to give me some more income and to keep some capital should I wish to move back to the UK when I get much older.

We plan to spend about 6 months of the year in Switzerland, and will travel in our caravan around Europe and the UK for the rest of the time.

Should I buy in Switzerland as a resident, and if I do what will be my tax position (bearing in mind all my income will be taxed in the UK) and how much will I have to pay for Health Insurance?

Or could I have the house as a holiday home and use UK travel insurance (2 years for a couple for European travel at 650 total) to cover our travels around Europe?

I realise this covers a lot of issues, but I'm not sure where to start. Any help would be gratefully received.
Hello,

Firstly in order to retire to Switzerland you need to demonstrate that you will not be a liability to the Swiss system at some point in the future. Your estimated annual salary of 55K will suffice for that. With respect to your options. If you are wanting to move in the near future and avoid prolonged discussions you are left only with the options of moving to Switzerland as a resident. If you were to take the other option of having a holdiay home you would run into difficulties with laws that prevent foreigners ie non-Swiss residents form buying holiday homes. You could of course rent but the getting a permit issue is much similar if you choose to retire here.

I would suggest reading a few other threads about what life is like living in Switzerland before you make up your mind. There is quite some difference between enjoying a holiday destination and living somewhere permanently...

Anyway if there are further questions do post and I will at some point get round to answering them if someone else does not first
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Old 20.02.2007, 13:07
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Re: Thinking of retiring to Switzerland

Admire the sentiment... being retired here myself. My advice would be to pick a spot (Sounds like you have) and tottle along to the Rathaus and ask the questions. I say this because we have a 3 tier system of government here and although national policy is thrashed out by the part timers in Bern the actual implementation and working policy is dealt with firstly at Cantonal level then at Community level and may actualy differ slightly from place to place. Take taxation for example.
So, pop along and ask the folks where you actualy wish to base yourself and get it from the horses mouth so to speak. I should think with a 100k to spend in the local community each year they will greet you warmly. Good luck and see you at the pensioners bingo.
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Old 20.02.2007, 17:44
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Re: Thinking of retiring to Switzerland

Hi Dixie,

I think the easiest way to move to CH for you is to apply for the B-EC/EFTA permit without gainful employment. You just have to show sufficient funds and health insurance.

For the sufficient funds part you can either submit a pension certificate or a regular passive income for CHF 50,000 or more, or, statements showing assets of CHF 250,000 or more, depending on the canton.

That's why I'm asking if anyone knows each canton's exact requirements, look at this thread, started by yours truly.

Liquid assets for B-EC/EFTA Permit

I don't know the exact regulations for tele-commuters, I suppose that technically you would still be working, so the cantons may tell you need the harder to get B-permit with gainful employment.
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Old 20.02.2007, 17:54
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Re: Thinking of retiring to Switzerland

About the tax question, in principle, if you don't reside in the UK anymore you don't owe Inland Revenue anything.

The swiss may just ask for a small wealth tax if you are living off your assets plus income taxes on your remittances to CH.

Any capital gains in your UK company are tax free in CH, but liable for taxes in the UK, as the company, not you, is domiciled in the UK.

This is the information I have found out so far, as I guess my situation is similar to yours.
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Old 20.02.2007, 18:42
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Re: Thinking of retiring to Switzerland

Manolo, thanks for that. What's the issues with the issues with the permit for working? Would it apply to me really - I would be drawing a salary and pension from the UK, but any work would be over the internet in the UK. Would they care?
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Old 20.02.2007, 18:46
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Re: Thinking of retiring to Switzerland

Thanks for all the other replies too, folks.

Manolo, I have just realised I have missed your important point about paying taxes in Switzerland instead of the UK. Does anyone know what the income (or equivalent) tax on CHF 130.000 would be?
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Old 20.02.2007, 19:06
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Re: Thinking of retiring to Switzerland

You should try applying for a permit without gainful employment. As EU citizens it's our right to reside in Switzerland if we are not taking jobs from swiss citizens.

With this permit, you are not entitled to work in or from Switzerland, so your internet work might be a problem, but I'm sure they don't have issues with people supervising their businesses, consulting or managing their investments part time (not day to day). A director job should be fine.

It depends on the canton to give you the permit. You should also request permission from the tax authorites. They are going to notice work income in your tax return without a work permit. Pension income is no problem at all.

Work permits are applied for by employers, and since you don't have a swiss employer you're not going to be able to get it.

Another option would be relocating your UK company to Switzerland, you might save taxes in the long run.
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Old 20.02.2007, 19:10
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Re: Thinking of retiring to Switzerland

Quote:
Thanks for all the other replies too, folks.

Manolo, I have just realised I have missed your important point about paying taxes in Switzerland instead of the UK. Does anyone know what the income (or equivalent) tax on CHF 130.000 would be?
With that income you can easily qualify in any canton.

There are links for web tax calculators on this site. Do a search. The short answer is, it depends on the canton and the gemeinde. I also think it depends on the source: if it's from a pension, from work or something else.
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Old 20.02.2007, 19:13
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Re: Thinking of retiring to Switzerland

tax on that amount will be less than the UK. Is this flow from a lump sum you have?
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Old 20.02.2007, 19:44
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Re: Thinking of retiring to Switzerland

Lob Rockster (is that what we call you?!?) Are you an ancient fan of 70s music like myself?

About 18,000 would be from a pension and the rest from running the company.

Does anyone know what the issues would be with relocating the company - all its income would be from the UK.
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Old 20.02.2007, 20:02
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Re: Thinking of retiring to Switzerland

you really want to talk to a UK accountant about that. I assume you're paying yourself as little as possible to cover NI contribs and taking the rest as dividends? You'll find Swiss income tax probably progressive enough to actually not work hard to avoid tax (I came over as a one-man Limited Company so I was avoiding as much as possible - and yes, pre-IR35 days ).

Lob Rockster? You're thinking of Rock Lobster - I might be daft but I'm not dyslexic
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Old 20.02.2007, 20:12
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Re: Thinking of retiring to Switzerland

If your company is a swiss entity, you can apply for a work permit through it and at the same time possibly save taxes. I don't know the specifics and I'd suggest asking an accountant or fiduciary familiar with both UK and Swiss tax systems to ask this kind of questions. Additionally some cantons are better than others for company relocation, Zug and Schwyz among the good ones.

Actually I am also planning on relocating my business, but I will do it when I am out of here, since it's a bureaucratic pain to do it as a US resident. Considering CH. In the meantime I will just show the swiss a wad of cash to get the permit.

There is another piece of information. In the future, don't know exactly when, EU citizens will have a right for work permits, without quota restrictions. Your company location will be eventually irrelevant for getting your work permit, but you will still save taxes.
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Old 05.05.2008, 19:52
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Re: Thinking of retiring to Switzerland

We are in a similar position ie considering future retirement to Switzerland.Last year (after an eventful 18mths!) we bought a place in the Valais and are planning on spending several weeks a year there but still have p/t jobs in the UK where we pay our taxes .We have now received a tax return for 'non residents' and are struggling to fill it in.
We will probably get help in Switzerland with the detail but my reading of a variety of posts on this part of the forum suggests that we should be covered by the 'double taxation' treaty with the UK.Is this correct? We do not rent our Swiss place out -it is used free by family and close friends if we aren't there-and pay our tourist tax to the local Gemeinde.
I understand that if we retire to Switzerland then we may have a tax levied on the property as it is an asset, but am I being over optimistic in thinking that as we have no income in Switzerland and pay full PAYE etc in the UK we won't owe any Swiss tax?
Also has anyone any idea what sort of documemtation we will need to send to the Swiss authorities as proof of our UK tax status?
Any advice gratefully received .
Thanks and good luck with any house purchase Dixie!
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