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Old 06.08.2021, 14:55
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Tax on pension if leaving leaving CH to go to UK?

Hi all. I've read several threads related to cashing out my pension when moving out of Switzerland, but am still a bit confused.
If I'm moving to the UK (so non EU) and want to cash out my Pillars 1&2 to take to the UK, do I have to pay taxes on the withdrawal? thanks!
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  #2  
Old 06.08.2021, 15:13
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Re: Tax on pension if leaving leaving CH to go to UK?

Yes, but only the swiss taxes which are rather small so consider yourself lucky. UK-CH income tax treaty specifically says that only the source country gets to tax lump sum pension payouts.

For pillar 2 you pay tax at source in the canton where your pension foundation is domiciled (assuming you withdraw when being UK resident). Move the money to SZ, they have one of lowest tax rates for this

For pillar 1 you don't get to choose the canton - it will be GE's tax at source where AHV is domiciled.
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Old 06.08.2021, 15:15
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Re: Tax on pension if leaving leaving CH to go to UK?

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Hi all. I've read several threads related to cashing out my pension when moving out of Switzerland, but am still a bit confused.
If I'm moving to the UK (so non EU) and want to cash out my Pillars 1&2 to take to the UK, do I have to pay taxes on the withdrawal? thanks!
Swiss withholding tax & except in exceptional cases there is no further tax to pay in the UK.

Those exceptional cases are where it's deemed 'disguised remuneration' which will not occur assuming you came to CH & got a normal job as 99% of people would do
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Old 06.08.2021, 15:26
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Re: Tax on pension if leaving leaving CH to go to UK?

Not sure the pillar 1 can be withdrawn even after Brexit.
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Old 06.08.2021, 15:27
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Re: Tax on pension if leaving leaving CH to go to UK?

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Not sure the pillar 1 can be withdrawn even after Brexit.
I suspect not too
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Old 06.08.2021, 16:27
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Re: Tax on pension if leaving leaving CH to go to UK?

thanks everyone. Silly me for hoping for a tax-free option!! I'll looking into SZ.
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Old 06.08.2021, 16:39
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Re: Tax on pension if leaving leaving CH to go to UK?

What are people doing with the Pillar 2 when they get it paid out?

Putting it into the UK pension pot? Paying down the mortgage? Investing in ISAs?

Interested because the day will come when I'm in the same boat.
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Old 06.08.2021, 16:53
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Re: Tax on pension if leaving leaving CH to go to UK?

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I suspect not too
I think you can now but there are quite a few restrictions- you canít have EU citizenship or be married to someone with Swiss/EU citizenship.
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Old 06.08.2021, 18:03
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Re: Tax on pension if leaving leaving CH to go to UK?

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I think you can now but there are quite a few restrictions- you can’t have EU citizenship or be married to someone with Swiss/EU citizenship.
I think it's based on the country of residence nothing to do with citizenship certainly for Pillar 2. (For pillar 2 leaving for the EU it depends if you are requited to be insured or not, as I got a full payout going to Malta aged 52)
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What are people doing with the Pillar 2 when they get it paid out?

Putting it into the UK pension pot? Paying down the mortgage? Investing in ISAs?

Interested because the day will come when I'm in the same boat.
100% in Fundsmith in my case, nearly a triple, it would have more than tripled if I did not have to wait 6 months after moving in October 14 to get the transfer.
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Old 06.08.2021, 20:34
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Re: Tax on pension if leaving leaving CH to go to UK?

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Not sure the pillar 1 can be withdrawn even after Brexit.
This has no relationship with brexit and UK whatsoever. Whether you can withdraw pillar 1 as a cash lump sum depends on your passport (=> social securities treaties of your country of origin with CH) rather than residency country. Most non-EU passports are OK.

New residency country matters for taxation however. Watch out that some (most?) countries will want to tax that payout if you become their resident, possibly as income at income tax rates. And AHV will only pay out once you've definitely registered as a resident somewhere else. Unlike pillar 2, there's no option to get the pay out just before leaving CH or while you're taking a long vacation in neutral countries. And no option to save on withholding taxes via SZ.

UK is one of few european countries that won't tax such pension lump sum due to the treaty they signed, so OP is lucky he'd only have to pay some single digit% swiss tax rather than double digit% income tax in most countries

Last edited by kerneltrick; 06.08.2021 at 20:50.
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Old 06.08.2021, 23:15
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Re: Tax on pension if leaving leaving CH to go to UK?

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UK is one of few european countries that won't tax such pension lump sum due to the treaty they signed, so OP is lucky he'd only have to pay some single digit% swiss tax rather than double digit% income tax in most countries
Doesn't it help to wait with registering abroad (where such a bureaucratic thing exists) until after the payout has arrived in your account?
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  #12  
Old 07.08.2021, 01:46
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Re: Tax on pension if leaving leaving CH to go to UK?

Pal, you need to renew your eyeglasses prescription. I wrote right above that AHV won't pay you shit until you bring them a paper saying you're resident somewhere other than CH. It's their explicit policy. The problem with registering as a resident is that you usually become liable to taxes in that country, potentially steep income taxes. Otherwise of course, a short vacation in some third country while waiting for the money to clear would solve that income tax problem and it works for pillar 2 but not AHV.

Anyway, for OP's case it doesn't matter as UK waived the right to tax his money in CH-UK tax treaty.
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Old 07.08.2021, 10:52
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Re: Tax on pension if leaving leaving CH to go to UK?

ok, so which countries are the best to relocate and become resident with EU passport if you had a choice? From other threads I was able to identify Malta and Portugal. What else?

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Pal, you need to renew your eyeglasses prescription. I wrote right above that AHV won't pay you shit until you bring them a paper saying you're resident somewhere other than CH. It's their explicit policy. The problem with registering as a resident is that you usually become liable to taxes in that country, potentially steep income taxes. Otherwise of course, a short vacation in some third country while waiting for the money to clear would solve that income tax problem and it works for pillar 2 but not AHV.

Anyway, for OP's case it doesn't matter as UK waived the right to tax his money in CH-UK tax treaty.
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Old 07.08.2021, 12:52
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Re: Tax on pension if leaving leaving CH to go to UK?

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Pal, you need to renew your eyeglasses prescription. I wrote right above that AHV won't pay you shit until you bring them a paper saying you're resident somewhere other than CH. It's their explicit policy. The problem with registering as a resident is that you usually become liable to taxes in that country, potentially steep income taxes. Otherwise of course, a short vacation in some third country while waiting for the money to clear would solve that income tax problem and it works for pillar 2 but not AHV.

Anyway, for OP's case it doesn't matter as UK waived the right to tax his money in CH-UK tax treaty.
Does ahv pay pillar1 if you leave to the Uk .?
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Old 07.08.2021, 20:08
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Re: Tax on pension if leaving leaving CH to go to UK?

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ok, so which countries are the best to relocate and become resident with EU passport if you had a choice? From other threads I was able to identify Malta and Portugal. What else?
UK?


Malta is decent option too, just stay non-domiciled there, keep money out of maltese banks and enjoy your tax free living there



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Does ahv pay pillar1 if you leave to the Uk .?

For lump sum refund? Yes. The question of whether you can get AHV refund is tied to your nationality, not the country of residency. Country of residency matters for taxation of that refund and UK is interesting here because they won't tax it on their end, but other countries you could consider for residency might.
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Old 07.08.2021, 20:32
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Re: Tax on pension if leaving leaving CH to go to UK?

What happens if you return to the Uk and hold a British passport? Specifically the ahv please. Can that be withdrawn
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Old 07.08.2021, 20:53
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Re: Tax on pension if leaving leaving CH to go to UK?

UK has a social security agreement with CH, so sorry UK passport holders aren't eligible for AHV refunds.

You need to be a citizen of one of the countries without such agreement (and give up your ineligible citizenship(s) too)
https://www.bsv.admin.ch/bsv/de/home...sabkommen.html
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Old 09.08.2021, 00:49
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Re: Tax on pension if leaving leaving CH to go to UK?

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UK has a social security agreement with CH, so sorry UK passport holders aren't eligible for AHV refunds.

You need to be a citizen of one of the countries without such agreement (and give up your ineligible citizenship(s) too)
https://www.bsv.admin.ch/bsv/de/home...sabkommen.html
There was a thread on here a few weeks ago saying the social security agreement with the UK has been terminated due to EU withdrawal? Canít find it now, but it had an official Swiss government website link.
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Old 07.11.2021, 23:57
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Re: Cash out pension when leaving CH permanently to go to the UK?

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Hi all. I've read several threads related to cashing out my pension when moving out of Switzerland, but am still a bit confused.
If I'm moving to the UK (so non EU) and want to cash out my Pillars 1&2 to take to the UK, do I have to pay taxes on the withdrawal? thanks!
Pillar 1 OASI cannot be withdrawn due to an existing Social Security Agreement between the UK and Switzerland. You can write to OASI for a statement and calculate roughly what that pension will payout and when, the statement takes roughly a month after it is requested.http://www.zas.admin.ch/zas/en/home/...ndividuel.html

Pillar 2 Mandatory and Non-Mandatory can currently be cashed out after you move to UK. Soonest payout is 1 day after you deregister. You pay a Swiss withholding tax only (no UK tax due to a double taxation agreement UK/CH, as long as the funds are a result of your work in Switzerland and you were resident in Switzerland for tax purposes and are a UK national), to minimise the withholding tax move the vested benefits to a low tax Kanton prior to requesting the cash out (you can do this prior to, or after leaving Switzerland and the banks cannot charge you for making the transfer of vested benefits from one to another). Kanton Schwyz applies a 4.8% withholding tax, there may also be a processing fee. You will need to provide a number of documents, the bank/foundation will give you a checklist. For example if you are unmarried you may need a Notarised and Apostille stamped affidavit to prove you are not married, its worth talking to the bank/foundation you are working with for the checklist. Its worth keeping an account open in Switzerland for the cash payout so you can then manage the exchange rate to your advantage and seek exchange rate offers from the bank or a company like WISE (formerly transferwise) to minimise their processing fees or margins.

Pillar 3 can be cashed out just tell your bank and provide the documents they need.

For help See www.independent-stiftung.ch/en/contact/ or https://pensexpert.ch/en
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Old 08.11.2021, 00:07
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Re: Cash out pension when leaving CH permanently to go to the UK?

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Pillar 1 OASI cannot be withdrawn due to an existing Social Security Agreement between the UK and Switzerland.
Concerns UK citizens only. Anyone else holding a passport of a country without such agreement can still cash it all out in UK. Free of tax on UK side. but on the swiss side there'll be withholding tax of Geneva canton in play, where AHV / OASI is legally domiciled
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