Transfer of Swiss Pension

Hello, since 2012 I have had a sum in a blocked Swiss Vested Benefits account which (since Brexit) I understand that I can now transfer out of Switzerland. Can I transfer the lump sum to my UK SIPP without incurring UK tax (under Art 18.2 of the double taxation treaty)? Or, as I will reach Swiss retirement age in 4 years time, if I wait until then to access the lump sum will it be liable to UK tax? Thank you

Hi,
 

To find out about tax implications on the tranfer of funds, you would need to speak to our pension schemes service team : Pension schemes  . If you are withdrawing the lump sum as a UK resident, and not transferring to an existing pension then this would be taxable in Switzerland based on the conditions in  Art 18.2. We cannot comment on the tax implications in 4 years time.  Thank you.

Thank you for your reply. I just wish to make sure I have understood your answer. If I withdraw the lump sum now and move it to my UK bank account as a UK resident, tax will only be payable in Switzerland under Article 18.2? And as no UK tax would be payable, is there an obligation to notify HMRC? Thank you.

Hi Swissbrit Marriott

If your siutation applies to article 18.2 then yes you would only pay tax in Switzerland which means you would not need to declare of notify HMRC of this amount. 

Thank you.

Hello, I just read the comments above for someone who wants to receive a lump sum in Switzerland and transfer it to UK. You confirmed that if art 18.2 of the DTT between swiss-UK is applicable, the person will be taxed in Switzerland only and no need to notify/declare HMRC even if he/she is a UK resident. I am exactly in the opposite situation: Currently living and fiscal resident in UK, but likely to move to Switzerland for work soon, becoming then a swiss resident (for tax). I will be 55 this summer, and intend to get a 25% lump sum out of my UK pension (defined contribution). Can I confirm that, using the same 18.2 article, I should be taxed in UK only and not declare it in Switzerland? That would help as this 25% is tax free in UK... Thanks to come back to me asap please, as I am in the final negotiations of my work contract with the swiss employer.

Hi,

If you are a Swiss resident with a UK pension then you can get relief from the UK on this on the basis you are declaring this to the Swiss authorities.

You will need to complete the relevant double taxation form.

Digest of Double Taxation Treaties April 2018

Double Taxation: UK-Switzerland (Form Switzerland-Individual)

Thank you. 

thanks for your comments but I was suggesting the other way round. I will become a swiss resident but my pension was built in UK and will be paid from my UK pension provider to my UK account. Following the article 18.2, this should mean UK wil apply the tax, and I will not have to disclose / notify Switzerland. Can you please confirm? thanks

Hi,

As suggested if you are a Swiss resident with a UK pension then you can get relief from the UK on this on the basis you are declaring this to the Swiss authorities. You will need to

complete the relevant DT form:

Digest of Double Taxation Treaties April 2018

and

Double Taxation: UK-Switzerland (Form Switzerland-Individual)

As a Swiss resident, the Swiss authorites have the right to tax this pension so to avoid double taxation it would be best to complete the above form.  If however this is a government pension,

then this would remain taxable in the UK unless you are BOTH a resident AND national of Switzerland. Likewise conditions change if this were a lump sum. You need to chcek the double

taxation agreement with the type of pension you have. 

Thank you.

 

sorry but i still dont understand your answer. see below extract of art 18.2 of DTT between UK and Swiss: Article 18 Pensions (1) Subject to the provisions of paragraph 2 of Article 19, pensions and other similar remuneration paid to an individual who is a resident of a Contracting State, shall be taxable only in that State. (2) Notwithstanding the provisions of paragraph 1, a lump sum payment derived from a pension scheme established in a Contracting State and beneficially owned by a resident of the other Contracting State shall be taxable only in the first-mentioned State. Following (2): If I move to Swiss and become Swiss resident, and get a pension lump sum from my UK pension (defined contribution): this means following point 2, that I have a lump sum derived from contracting state (UK) , beneficially owned by resident of other state (switzerland), this is taxable only in the first mentioned state : UK. So no tax in Switzerland . Dont you agree? Thanks

Hi litch1

This would be correct if you meet the conditions in the double taxation agreement. 

Thankyou.

Regards.

My husband and I are UK resident / UK citizens eligible for a UK state pension next year. We lived in Switzerland between 1995-2002 and have a letter from the Swiss Pension Authorities in 2006 saying we are eligible for a Swiss pension (each of us from 2021 and 2022 or jointly). The precise amounts were provided and are small just over £100.00 (equivalent) p.m. We wrote to them last month to inquire about obtaining and they replied as follows: ‘Where to file your pension application depends on the insured person’s nationality and country of residence. In this case, the application should be made to the British pension service. That organisation is competent to send us the necessary forms for the examination of the pension application in Switzerland. In the meantime, we kindly ask you to return the following document/s: - application for an old-age pension for persons residing outside Switzerland duly completed, dated and signed - copy of the identity document of all persons mentioned in the application (including the children even if they are now adults) - copy of the marriage certificate (1 per marriage if applicable) - copy of the divorce decree with the date of entry into force (if applicable)’ I wonder if you can help with our immediate questions: -Will we be eligible for the pension from Switzerland ? we do not intend to live there. -What information/forms do you require from us? -What could be the tax implications? Grateful for your guidance. Thanks

Hi,

I regret that we are not in a position to advise if you are eligible for the Swiss Pension.  This would be a matter for the Swiss authorities to answer.  Should you receive a foreign pension, then it is criteria for completing a self assessment tax return and you should contact the self assessment helpline on Self Assessment: general enquiries

Thank you.

 

I am not sure of the process for claiming a pension from Switzerland but from what the Swiss say, it appears similar to that for claiming a pension from an EU country, i.e. you claim through the UK International Pensions Team on 0191 21 87777. For EU pensions they will send you a form CFN901 and looking at that form it suggests the same process applies for Switzerland, i.e. that country is also subject to the EU regulations on the Coordination of Social Security System and the same form needs to be completed. It is not possible to download that form (yet), so, a call to the number above will hopefully get the process started for you.

Hello, I have read the comments above, that I can withdraw my pension savings in Switzerland, paying witholding tax there, and do not need to declare these in the UK. I am still paying into a UK pension scheme (I am currently 54). There are various rules which limit the amount which can be paid into a UK pension - these reduce from £40k/year to £4k under various complex circumstances. Does the withdrawal of my Swiss pension mean that my allowance would reduce to £4k? Thanks for your help!

Hi Mikehhh,

Yes, that is correct.

Thank you.

Dear HMRC - Firstly, thank you for all the efforts in responding to these questions. I would like to check something in relation to a Swiss Pension. I lived and worked in Switzerland from 2012-2016 and was a Swiss Tax Resident (and non-UK tax resident) and in 2016 became a UK tax resident and remain one to date. I "cashed" in my vested benefit Swiss pension in January 2022 and received a lump sum payment in my UK bank account. Swiss witholding tax was deducted and a net amount received. If I ready the above posts and Article 18/19 of the 1977 Switzerland/UK DTA it would appear that I need not include this payment in my tax return under section "Overseas pensions, social security benefits and royalties etc" as the criteria of section 18.2 of the DTA is met. "a lump sum payment derived from a pension scheme established in a Contracting State and beneficially owned by a resident of the other Contracting State shall be taxable only in the first-mentioned State" Kindly confirm. Many thanks and best wishes 

Hi, I have a similar question. I live and work in the UK with BRP since May 2022. Before coming to the UK, I have been living and working in Switzerland. Because I moved to the UK, I could get all of my Swiss occupational pension money. My occupational pension money has been taxed in Switzerland and transferred to my Swiss bank account. My plan is to transfer that money to my bank account in the UK and use it for buying a property for living. Can I do the transfer? Do I need to pay tax for it in the UK? I would be grateful for your help and recommendation.

Hi RomeoBravo,

That is correct

Thank you.

Hi a_re,

Yes the money can be transferred and no tax will be due in the UK on the actual pension money but you will be liable to tax on any interest or dividends that this then generates.

Thank you.

Hello HMRC, I have a similar question about article 18.2. Having relocated back to the UK in June 2022 I am now a UK tax payer. I have a lump sum from my pension in Switzerland (with all relevant taxes paid in Switzerland) that I would like to transfer back to the UK. Does what tax is paid depend upon where the money is paid in to? Can I confirm that if I transfer the payment directly to my savings account in the UK and that it will not be taxable in the UK or is this only the case if I transfer to a SIPP? Thank you for your help.