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Old 12.07.2011, 17:40
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Residence permit living on independent means

Hello everyone,

I am new to the forum with a few unanswered questions. I have searched the other threads but did not find the info I am looking for, so please excuse me if these questions have been raised already.

I'm 56, married, no kids, Italian citizen. I'd like to move to Switzerland (Ticino) with my wife and live on independent means (i.e. living on the financial income of a liquidity equivalent to 7 million francs invested in funds, stocks, etc. plus other 2 million francs to be used to buy a house - total net worth about 9 million francs). I will have no other income, only the capital gains from my financial investments, and all my assets will be moved to a few Swiss banks after obtaining the residence permit. I will have no other income from abroad. I'm not interested in lump sum taxation.

These are my questions:
1) Would a residence permit be easily issued to me and my wife, albeit we don't have any real 'income' other than the capital gains deriving from my financial investments?

2) Having no 'income', would I be taxed on Wealth only, or any capital gain will be considered as an 'income' and taxed separately?

3) Would I have to pay AVS? If so, on which income base? And my wife?

Thank you in advance for your help, I'm quite confused right now...
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Old 12.07.2011, 17:51
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Re: Residence permit living on independent means

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Hello everyone,

I am new to the forum with a few unanswered questions. I have searched the other threads but did not find the info I am looking for, so please excuse me if these questions have been raised already.

I'm 56, married, no kids, Italian citizen. I'd like to move to Switzerland (Ticino) with my wife and live on independent means (i.e. living on the financial income of a liquidity equivalent to 7 million francs invested in funds, stocks, etc. plus other 2 million francs to be used to buy a house - total net worth about 9 million francs). I will have no other income, only the capital gains from my financial investments, and all my assets will be moved to a few Swiss banks after obtaining the residence permit. I will have no other income from abroad. I'm not interested in lump sum taxation.

These are my questions:
1) Would a residence permit be easily issued to me and my wife, albeit we don't have any real 'income' other than the capital gains deriving from my financial investments?

2) Having no 'income', would I be taxed on Wealth only, or any capital gain will be considered as an 'income' and taxed separately?

3) Would I have to pay AVS? If so, on which income base? And my wife?

Thank you in advance for your help, I'm quite confused right now...
In brief you wouldn't have any problem having a permit as an EU citizen, taxes & AVS will be calculated on your annual ROI if i stand correct not the whole sum, financial experts on the forum can reconfirm this.
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Old 12.07.2011, 17:52
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Re: Residence permit living on independent means

If you get a tax deal, you will assumed to earn approx 5 time your rent or notional rent. There is no tax on capital gains, if the authorities don't think your going to pay anything they probably won't be in a hurry to give you a B permit.

I know someone who paid 7,900,00 for a property,his assumed income is 400K & pays 120K tax, thats in VS.


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Hello everyone,

I am new to the forum with a few unanswered questions. I have searched the other threads but did not find the info I am looking for, so please excuse me if these questions have been raised already.

I'm 56, married, no kids, Italian citizen. I'd like to move to Switzerland (Ticino) with my wife and live on independent means (i.e. living on the financial income of a liquidity equivalent to 7 million francs invested in funds, stocks, etc. plus other 2 million francs to be used to buy a house - total net worth about 9 million francs). I will have no other income, only the capital gains from my financial investments, and all my assets will be moved to a few Swiss banks after obtaining the residence permit. I will have no other income from abroad. I'm not interested in lump sum taxation.

These are my questions:
1) Would a residence permit be easily issued to me and my wife, albeit we don't have any real 'income' other than the capital gains deriving from my financial investments?

2) Having no 'income', would I be taxed on Wealth only, or any capital gain will be considered as an 'income' and taxed separately?

3) Would I have to pay AVS? If so, on which income base? And my wife?

Thank you in advance for your help, I'm quite confused right now...
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  #4  
Old 12.07.2011, 17:54
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Re: Residence permit living on independent means

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In brief you wouldn't have any problem having a permit as an EU citizen, taxes & AVS will be calculated on your annual ROI if i stand correct not the whole sum, financial experts on the forum can reconfirm this.
It is possible to just pay tax on the actual income, however a tax deal may be cheaper. I am not sure why the OP does not want one, makes the tax return much easier!
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Old 12.07.2011, 17:59
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Re: Residence permit living on independent means

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It is possible to just pay tax on the actual income, however a tax deal may be cheaper.
This is unclear to me: I would have NO income, so I think I would have to be taxed on wealth only and pay NO income tax... Is this correct?

P.S. As said, I'm not interested in lump sum taxation as it would be too high.
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Old 12.07.2011, 18:03
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Re: Residence permit living on independent means

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This is unclear to me: I would have NO income, so I think I would have to be taxed on wealth only and pay NO income tax... Is this correct?
.
In theory yes, it's if they will give you a permit , I doubt they will rush your application through.

In any case your house will give you 'income' which you will be taxed on, the theoretical rent that you would pay if you rented it.

There is a risk that they will treat you as a trader & tax your gains as income, a tax deal could be way cheaper.
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Old 12.07.2011, 18:11
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Re: Residence permit living on independent means

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In theory yes, it's if they will give you a permit , I doubt they will rush your application through.

In any case your house will give you 'income' which you will be taxed on, the theoretical rent that you would pay if you rented it.

There is a risk that they will treat you as a trader & tax your gains as income, a tax deal could be way cheaper.
Thanks fatmanfilms, my idea is to invest my liquidity in a very very prudential way just to compensate inflaction, and simply withdraw every year the amount deemed necessary to comfortably live in Switzerland, calculating the principal to go to zero when I have, say, 99 years.

I understand that this way I would have NO income, and this is why I was wondering if they would issue a residence permit.
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Old 12.07.2011, 18:20
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Re: Residence permit living on independent means

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Thanks fatmanfilms, my idea is to invest my liquidity in a very very prudential way just to compensate inflaction, and simply withdraw every year the amount deemed necessary to comfortably live in Switzerland, calculating the principal to go to zero when I have, say, 99 years.

I understand that this way I would have NO income, and this is why I was wondering if they would issue a residence permit.
I don't think they will, however your house will produce an income thats taxable. Unless your going to have an income of 120,000 + which you pay tax on (Tax Deal) you wont get a permit, which is why they are popular.

You could go and live in Malta & pay Zero tax, your only taxed on income remitted to Malta. So by living on capital you pay Zero.
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Old 13.07.2011, 02:15
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Re: Residence permit living on independent means

I can't see them having a problem with your resident permit. Switzerland is part of the free movement agreement for EU/EEA citizens. If you show them you have x per year to live on they will not have a problem giving you are permit.
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Old 13.07.2011, 03:08
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Re: Residence permit living on independent means

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Hello everyone,

I am new to the forum with a few unanswered questions. I have searched the other threads but did not find the info I am looking for, so please excuse me if these questions have been raised already.

I'm 56, married, no kids, Italian citizen. I'd like to move to Switzerland (Ticino) with my wife and live on independent means (i.e. living on the financial income of a liquidity equivalent to 7 million francs invested in funds, stocks, etc. plus other 2 million francs to be used to buy a house - total net worth about 9 million francs). I will have no other income, only the capital gains from my financial investments, and all my assets will be moved to a few Swiss banks after obtaining the residence permit. I will have no other income from abroad. I'm not interested in lump sum taxation.

These are my questions:
1) Would a residence permit be easily issued to me and my wife, albeit we don't have any real 'income' other than the capital gains deriving from my financial investments?

2) Having no 'income', would I be taxed on Wealth only, or any capital gain will be considered as an 'income' and taxed separately?

3) Would I have to pay AVS? If so, on which income base? And my wife?

Thank you in advance for your help, I'm quite confused right now...
Sorry Paisa but you are asking this in a forum? With your Wealth take a lawyer or a fiduciario and they will advice you correctly... anyway for the permit no problem ,but you will have to pay taxes and it is not going to be cheap at all. Despite what Tremonti says, that Switzerland is a fiscal paradise like the Caymans, you will soon realize that it is not like that at all and here taxes must be paid...
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  #11  
Old 13.07.2011, 06:11
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There is no tax on capital gains in Switzerland but there is on interest and dividends. Banks like CS and UBS have advisors specialising in your situation so why not contact one of them for advice?
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Old 13.07.2011, 16:42
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Re: Residence permit living on independent means

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Sorry Paisa but you are asking this in a forum? With your Wealth take a lawyer or a fiduciario and they will advice you correctly... anyway for the permit no problem ,but you will have to pay taxes and it is not going to be cheap at all. Despite what Tremonti says, that Switzerland is a fiscal paradise like the Caymans, you will soon realize that it is not like that at all and here taxes must be paid...
My 'wealth' is only on paper right now. Unfortunately all of this is simply an hypothesis. And BTW, I don't mean eluding taxes, just being aware what they will be.
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Old 17.07.2011, 21:07
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Re: Residence permit living on independent means

Ciao Mandracchio,

since I suppose you do speak italian (fluently) have a look at the following address:
http://www4.ti.ch/dfe/dc/dichiarazio...x-pf/generale/

You can download the software which shows you what kind of income needs to be reported (basically everything) and what is tax deductible...
Plus you will be taxed on whatever net assets you own.

All in all the swiss system is very fair, when compared to other countries ...wink, wink.
With the kind of figures you posted, I think you should be able to juggle a deal with the tax authorities.

Cordiali saluti,

Paul
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Old 17.07.2011, 21:26
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Re: Residence permit living on independent means

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I think you should be able to juggle a deal with the tax authorities l
The OP would rather pay ZERO, thats the issue here.
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Old 17.07.2011, 21:52
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Re: Residence permit living on independent means

Check out point #2 in his opening statement.
I'm just pointing him to where he can obtain official info & help.
As far as paying Zero.... I won't comment on that.
Plenty of newspapers in his country comment on the dire state of the economy and of fiscal revenue.

I personally think that if you *choose* to live in a country you *like* you should be prepared to pay that country's taxes.
Innit?

P.
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Old 18.07.2011, 10:27
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Re: Residence permit living on independent means

Thank you Uncle GroOve for your kind answer. Truth is that I would gladly pay all taxes required in Switzerland, perhaps in my first post I wasn't able to explain correctly the scenario I have in mind.

I'll try to re-explain it better:

I would come to Switzerland with a certain capital in liquidity (let's suppose that this capital is the outcome of a few long term stock investments, on which I have already paid all income taxes and all capital gains in my country). From the previous answers I understand that I would have no problems in being awarded a residence permit.

I would not work nor generate any income in Switzerland or abroad. Obviously, I would invest my money once in CH (say through a bank investment management service, just to 'beat' inflaction and repaying bank fees).

I might buy or rent a house in CH (Yes, I know that owning a house would generate an 'income', but this is secondary in this discussion and can be temporarily overlooked).

I would live withdrawing every month (or every six months, or every year, etc.) from my bank account the sum deemed necessary for living comfortably in Switzerland, until my capital will eventually go to zero when I am, say, 99 years old.

Please remember that I would have *already* paid all income taxes on production of my invested capital, and the capital gains deriving from the bank management of this money should not be taxed in CH (as far as I understand).

My fundamental question is the following: Is it correct that in CH I will of course have to pay the Wealth tax on all my liquidity, assets and real estate, but apparently not have to pay any income tax (except that on the 'income' deriving from my house, if I decide to buy it), since I would have NO real 'income'?

Just to be clear: I am willing to pay all due taxes in CH, just trying to understand what would be the taxes in this scenario, albeit uncommon.

Thanks again for your help, patience and time! :-)
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Old 18.07.2011, 11:40
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Re: Residence permit living on independent means

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Thank you Uncle GroOve for your kind answer. Truth is that I would gladly pay all taxes required in Switzerland, perhaps in my first post I wasn't able to explain correctly the scenario I have in mind.

I'll try to re-explain it better:

I would come to Switzerland with a certain capital in liquidity (let's suppose that this capital is the outcome of a few long term stock investments, on which I have already paid all income taxes and all capital gains in my country). From the previous answers I understand that I would have no problems in being awarded a residence permit.

I would not work nor generate any income in Switzerland or abroad. Obviously, I would invest my money once in CH (say through a bank investment management service, just to 'beat' inflaction and repaying bank fees).

I might buy or rent a house in CH (Yes, I know that owning a house would generate an 'income', but this is secondary in this discussion and can be temporarily overlooked).

I would live withdrawing every month (or every six months, or every year, etc.) from my bank account the sum deemed necessary for living comfortably in Switzerland, until my capital will eventually go to zero when I am, say, 99 years old.

Please remember that I would have *already* paid all income taxes on production of my invested capital, and the capital gains deriving from the bank management of this money should not be taxed in CH (as far as I understand).

My fundamental question is the following: Is it correct that in CH I will of course have to pay the Wealth tax on all my liquidity, assets and real estate, but apparently not have to pay any income tax (except that on the 'income' deriving from my house, if I decide to buy it), since I would have NO real 'income'?

Just to be clear: I am willing to pay all due taxes in CH, just trying to understand what would be the taxes in this scenario, albeit uncommon.

Thanks again for your help, patience and time! :-)
First of all, let *me* apologize if I came across a bit rudely...
The fact that you were taxed at the source in a foreign jurisdiction would apply only to a given year (say, 2011).
Afterwards, if you plan to move your *fiscal domicile* here to CH you will be taxed here.
Caveat: the fiscal authorities may decide to tax you for the portion of the first year ("tassazione intermedia")...

As you may have seen from the e-tax software (the link I posted above), here in Switzerland a number of cash flows are taxed as Income: lottery wins, royalties, annuities, income from securities - i.e. dividends, coupons - and so on.
These are all summed under "Redditi" - i.e. taxable income.

From my humble experience as a CH taxpayer, the key is to be efficient in your tax deductions: using a mortgage to purchase a house allows you to deduct your debit interest (whereas you cannot deduct your rent!), contributing to a 2nd or 3rd pillar account, and so on. I am by no means a tax advisor, and you should definitely consult one to learn all the tricks of the trade....

ALTERNATIVELY:
The tax deal you may be able to strike with the local tax authorities will basically allow you to pay a lump-sum tax, regardless of the income flows; you will still have to detail your income flows in your tax declaration.

Ciao, cordiali saluti...

Paul
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Old 18.07.2011, 15:18
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Re: Residence permit living on independent means

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My fundamental question is the following: Is it correct that in CH I will of course have to pay the Wealth tax on all my liquidity, assets and real estate, but apparently not have to pay any income tax (except that on the 'income' deriving from my house, if I decide to buy it), since I would have NO real 'income'?

Just to be clear: I am willing to pay all due taxes in CH, just trying to understand what would be the taxes in this scenario, albeit uncommon.

Thanks again for your help, patience and time! :-)
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As you may have seen from the e-tax software (the link I posted above), here in Switzerland a number of cash flows are taxed as Income: lottery wins, royalties, annuities, income from securities - i.e. dividends, coupons - and so on.
These are all summed under "Redditi" - i.e. taxable income.
What Paul said. Other than dividends and coupons, nothing else will be taxed as income.Your only possible arbitrage is between the amount of wealth tax you'd face and a lump sum deal. If you plan to derive a lot of income from say perpetual bonds, a lump sum "could" make sense.

You will need to pay health insurance - no way to escape that one :-).

Securing a "retired" permit on that capital should be pretty straightforward. Any assertion that the authorities won't give you a permit in a hurry or otherwise is uninformed speculation - you are legally entitled to it.

I can give you more details if needed - we (also) handle that kind of stuff.
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