Transfer of Swiss Pension

Hello HMRC, just following up on my request. Kind regards Gray

Hi Gray66 Thomas,
Tax is due based on where you are tax resident.
If  UK resident but non domiciled, you would then consider remittance basis and if the money is remitted to the UK then you could pay tax here: Paying tax on the remittance basis (Self Assessment helpsheet HS264)
If you are not UK resident then you would not declare the foreign income.
Thank you. 

Thanks HMRC Thanks for the advice re the UK resident non-domiciled. I have not lived in the UK for nearly 30 years, so quite sure this does not apply to me. If you could please provide some further clarity Please confirm the following scenario which applies to 18.2.... If I return to the UK in February 24, and then receive the lump sum into my Swiss account in March 24 after I have returned to the UK, am I liable to pay any UK tax on the Swiss pension IF I have already paid tax to the Swiss authorities. Kind regards Gray

Hi,

If you are UK tax resident in the year, you need to declare the Swiss pension. You can then claim foreign tax credit relief for the Swiss tax paid to set against any UK tax due.

Tax on foreign income

Thank you.

Hello HMRC, I was resident in Switzerland from 2010-2019 where I contributed to a swiss pension scheme, then became a UK resident in 2019 and have been paying tax in the UK ever since. I am considering withdrawing my vested benefit Swiss pension (entire capital) as a single, one-off lump sum payment to a UK bank account in March 2024. Based on my preliminary communication with my Swiss pension holder, Swiss withholding tax would be deducted and I would receive a net amount (post Swiss tax). Based on Article 18/19 of the 1977 Switzerland/UK DTA, it is my understanding that I would not need to include this payment in my UK tax return, 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"). Please could you confirm that this is correct, and that my lump sum pension payment would not be taxable in the UK and thus not need to be declared in the tax return? Many thanks.

Hi,

That is correct. However, make reference to the fact that you do receive the income on your tax return and that it is exempt under article 18 of the DTA.

Thank you.

Thank you very much. I have two follow-up questions on this: - in which section of my tax return should I mention that I received that one-off lump sum and that it is exempt under article 18 of the DTA? - would receiving this one-off lump sum from my swiss pension scheme trigger the MPAA? The guidance from the gov.uk website (https://www.gov.uk/guidance/work-out-your-allowances-if-youve-flexibly-accessed-your-pension) states that the MPAA may be triggered if you have taken money from a "qualifying overseas pension that has had UK tax relief". None of my contributions to the swiss pension scheme have had UK tax relief as I was a swiss resident when contributing to the scheme, and according to article 18 of the DTA the one-off lump sum is "not taxable" in the UK, which in my understanding is different from benefitting from tax relief..? So the MPAA should not be triggered? Or am I misunderstanding the criteria triggering the MPAA? Many thanks

Hi NRichardson ,
You would make reference to the pension in the additional comments section of the return.
As no UK tax relief has been applied on the Swiss pension, this wont trigger the MPAA.
Thank you. 

Hello. I was looking for some information and was referred to this forum. I found it very helpful - thank you HMRC. I am seeking a clarification to be certain of my understanding: I have been employed in Switzerland for 11 years. I am not a Uk national but a resident (with leave to remain). I plan to move to Uk full time soon. I have contributed to the Swiss state pension for 11 years and wanted to check if I can withdraw this in Switzerland and pay withholding taxes here?

Hi,

Under article 18 of the double taxation treaty, tax on the pension is paid in the country you are resident. If this is therefore taken when you are in the UK then tax will be due here.

Thank you.

Hello, I‘m a British national and after living in Switzerland for 7 years, moved back to London in March 2024. I plan on moving by Swiss pillar 2 and 3 pension to my UK bank account in cash (i.e. a cash withdrawal, not for a property purchase). I understand that I am not liable to UK tax on the withdrawal (based on the dual taxation agreement that I‘ve read), but would like confirmation before instructing the Swiss pension provider. Thanks a lot, 

Name removed admin .

Hi Camilla Loomes,
According to article 18 of the DTA, 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.
If you meet these conditions then it is only taxable in Switzerland.
Thank you. 

Good morning HMRC Thanks for this useful information so far, I have an additional query. I lived in Switzerland 2014 - 2016 and returned to living and paying tax in the UK. I am considering receiving my Swiss pension as a lump sum cash payment. Firstly, I understand from the above comments that NO UK tax payment would be required for this, due to the DTTA. However I have been informed on the Swiss side that as the tax to be paid in Switzerland will be in excess of CHF1000, I will be eligible to apply for a refund of the tax there. However in order to apply for the tax refund, I need to show proof that tax has instead been paid in the UK or that the UK tax authority is aware that I received the lump sum payment. How to I go about this if no tax is due in the UK? https://www.zh.ch/de/steuern-finanzen/steuern/quellensteuer/rueckerstattung-quellensteuer-auf-kapitalleistung.html Thanks in advance

Hi matthore,
Article 18 of the UK  Switzerland tax treaty:
1977 UK-Switzerland Double Taxation Convention as amended by the 2017 protocol – in force
Advises that as a resident of the UK, you are only taxable on your Swiss pensions in the UK, subject to the other clauses in the article.
If you are taxable only in the UK on your pension, you will need to request a certificate of residence:
How to apply for a certificate of residence to claim tax relief abroad
You can give the certificate to the Swiss authorities, to claim back the tax paid on the pension.
The Swiss pension would be delcared in the UK in a Self Assessment tax return.
Thank you. 

Good morning HMRC, I understand from the previous answers that receipt of lump sum pensions from the Pillar 2 is not taxable in the UK for UK residents as it is it is exempt under article 18 of the DTA. Does this also extend to the Pillar 1 part of pension (i.e. OASI contributions) if they were to be paid out as a lump sum?

Hi James,
Please refer to Article 18 of the Double Taxation Treaty - 1977 Switzerland/UK Double Taxation Convention as amended by the 2009 Protocol
Thank you.

Hello HMRC, I lived, worked, paid taxes and paid into private pension schemes in Switzerland between 1998 and 2007. Since 2007 I have lived, worked, paid taxes and made payments into private pension schemes in the UK. I am over 64 years old. Having permanently left Switzerland, I am eligible to withdraw my Swiss private pension as a lumpo sum. I have advice from my UK and Swiss tax accountants that such a lump sum would not be subject to tax in the UK, but that Switzerland would impose a withholding tax. All of which is supported by earlier posts in this forum. This withholding tax paid to Switzerland could be reclaimed with the cooperation of the tax authorities of my country of residence, namely the U.K. There is a set form for this, part of which needs to be completed by HMRC. Questions: 1 Would HMRC be prepared to assist by completing the relevant portion of this form? 2 If so, what evidence or supporting documents would be required? 3 In particular, do the lump sum funds need to be received into a UK bank account? I will use them in italy, where I plan to retire, so would prefer not to have to exchange from CHF to GBP to Euro if possible 4 Would there be any implications for my UK tax position if HMRC were to complete this form - would the money thereby become taxable in the UK, for example? Thank you

Hi ,
 

Please have a look at article 18 of the UK / Swiss tax treaty, regarding pensions (: 1977 UK-Switzerland Double Taxation Convention as amended by the 2017 protocol – in force  ).  It advises that for UK residents, lumpsums taken from a Swiss based pensions, will be taxable only in Switzerland.  You should send the completed from to H.M. Revenue and Customs Self Assessment BX9 1AS.  There would be no requirement for you to bring the pension payments to the UK.  The tax treaty states it is not taxable in the UK, so would not become so from the completion of any forms. Thank you .