How to declare UK ISAs on Swiss Tax Return

Finance, Taxes, Banking, Insurance and Retirement
1
Hi all,

I have a UK-based ISA, and I was curious how I represent this on the tax form.

At this point, someone always pipes up - "only an issue if you declare it, haha", well, I already have, so that is not an option. I just want to make sure I am doing it right, since the tax folks haven't responded to the 2 returns I have done so far.

In the 'Wertschriften-und Guthabenverzeichnis' section, I can declare the end-of-year value, (number of shares times the share value), but do I need to declare income? Although it does increase (hopefully!) in value, all growth is re-invested in the ISA, and I don't realise actual income until I cash it in? Is that correct thinking? Or do I have to put in the calculated difference in end of year value from last year?

A colleague compared ISAs to a third pillar investment, and I believe you don't declare any fund increase there, just your contributions...

My understanding also is that I can maintain the ISA while working in Switzerland, and if return to the UK, I can realise the tax saving, but I cannot add to the ISA (invest more money) while not resident there.

I also read somewhere, but cannot find it now, that you can fill in a form for the UK tax authorities, so the ISA is not taxed at source in the UK, but allows the Swiss to tax it? Not certain about this part.

cheers,

Slayer.

2
Hi,

Not brilliant news as it's not tax free in CH, so any income is taxable. Capital gains are not payable in CH.

It's not a pension so can't be compared to a 3rd Pillar.

You can hold an ISA but not add to contributions.

It's possible to switch provider however you have to cross out that your resident in the UK on the declaration. You should talk to the new provider first as they will have to 'look this up' as they are unlikely to know unless you tell them it's OK ! I have changed ISA's twice since being in CH, to be technically correct it was a PEP the first time.

3
No ISA is taxed at source and the Swiss will tax you regardless if you have a form or not.

"ISA" is a tax free wrapper around savings and/or investments that is not recognised in Switzerland. You declare it to the Swiss like any other savings or investment accounts but you don't claim that tax has already been paid. I put mine as "Aktien (boerslich)" but add the dividend income manually in GBP (converted to CHF) rather than use the Swiss dividend look-up tables that are built into the software I have. If for the ISAs you do indeed get the gross amount of dividend then you should declare the gross amount. For non-ISA dividends I believe you would declare the net amount as the tax credits are not recognised as "withholding tax" Switzerland.

4
Thanks fatmanfilms and Landers,

This sort of makes sense, except the ISA I had changed ownership some years back, to a company that doesn't support online access - all communications by phone/letter. When I called them, all they could give me was a current end of year value, no dividend information. As far as I know, they reinvest any earnings, so if I use the previous year's end of year value to work out income, is that valid?

This is an ISA (originally PEP) that I took out about 15 years ago, and left it, basically. It had done really well before the crash! The new management initially wouldn't give me any info, as difficult to confirm identity from Switzerland.

cheers,

Slayer.

5
Interesting, some site seems to be siphoning off EF posts:

http://www.education-fr.com/vb/finan...ax-return.html

6
I don't think it's valid as you might have a capital gain or loss so not all the difference is due to income, but the Swiss might be happy to tax you like that if you can't show anything otherwise.

I also had a PEP which shot up, and then shot down No idea even where it is now.

7

What crash are you talking about? My ISA's are up 13% in GBP or 24.5% in Euros thanks to Fundsmith in the first 11 months of this year

8
So just to summarise:

If you declare ISAs on Swiss tax return:

-Best to declare them as "Aktien (boerslich)", so it is clear they are shares.

-Any growth in value which may be reinvested is declared in "Nennwert Stückzahl" (increase in shares) column and "Steuerwert am xxx" (end of year value) column of the Wertschriften- und Guthabenverzeichnis form. So for this you need to know the share/unit fund value as well total shares.

-Any dividend income is declared using Gross value from tax certificate in Column A "Werte mit Verrechnungssteuerabzug" of the form.

Is that right?

Info from Landers: ISA income is not recognised as taxed at source. Does that apply to normal UK shares I own as well? So both would be declared as Gross income in column A??

So the only situation I see where I would declare income in Column B is for Swiss bank accounts (I own no Swiss shares yet). Is that also correct?

Side note: what is the meaning of "qualifizierten Beltelligungen" (qualified holdings?) in the Wertschriften- und Guthabenverzeichnis form?

Many thanks for your replies so far - slowly untangling this tax return stuff for non-Swiss assets. My apartment is the next headache, but that is probably another post as off-topic.

9
See this: http://www.hmrc.gov.uk/manuals/dtmanual/DT18159.htm (DT18159 - Switzerland: double taxation agreement, Article 10: Dividends)

10
Thanks Caryl,

Looks like there is something in place to avoid being taxed twice, but how do I declare these ISA dividends on the Swiss Wertschriften- und Guthabenverzeichnis form? For example, Gross figure from tax voucher in Column A or B? Given Landers' information?

(I also have normal UK shares to declare, which had quite a bit of dividend payout, so want to get this right).

cheers,

Slayer

11
Already answered in the other thread, please don't ask the same questions in more than 1 place.

Foreign income producing with tax certs on DA-1, other stuff on the normal page.

A DTA gives you credit for any tax paid, you will actually get that tax repaid as cash fairly quickly probably a year before the tax bill is settled.

12
sorry fatmanfilms, didn't see your post in time. for some reason this tax return is giving me a real headache. probably because I am trying to do it correctly. I have to say that other thread is fantastic ( How to do your tax return Kt ZH if it help others searching). It is not I didn't see it before, i just didn't actually understand the conversation until now.

I had the tax office contact me about my (first) 2012 asking for a bunch of evidence...so i still haven't got final feedback from my first return yet! they are probably still trying to decipher it. :-)

13
Ok, I read through the help notes on the DA-1 form ( http://www.steueramt.zh.ch/internet/...3+2014+DEF.pdf ), and I have more queries, sorry...

In the explanations section for DA-1, I came across this:

"Wenn die nicht rückforderbaren ausländischen Steuern (Spalte Pauschale Steueranrechnung) insgesamt den Betrag von CHF50.–

nicht übersteigen, wird keine pauschale Steueranrechnung gewährt! In diesem Fall sind die Erträgnisse zu dem um die nicht

rückforderbare ausländische Steuer gekürzten Betrag im ordentlichen Wertschriftenverzeichnis aufzuführen."

I google translated this, but the meaning was not clear to me. Does this mean that if the "Pauschale Steueranrechnung" value does not exceed 50 CHF, do not bother claiming? And would this column be the equivalent of "Tax deducted" on a UK Tax certificate? and does this apply to the overall claim, or each individual claim?

Also, for the % column:is there a max value that can be put here, since it is "Pauschale"? If it is not 15% as per the example, does that go into the "Steuerrückbehalt USA" column? My example is, I own some company shares from an old employee scheme, but the company is now Canadian, so I get the dividends in US dollars (as it is traded on a US exchange) minus Canadian withholding tax, and the dividend converted to a GBP value by the firm in the UK broker that handles this for (ex)employees. The other significant examples are bog-standard UK ISAs.

I am sure this will make sense in time, but right now, the more I try and get it right, the more I am foundering! :-)

cheers,

Slayer.

14
Tax deducted can be any rate, so don't worry if it's not 15%, US dividends paid by a Swill broker have 30% deducted.

I would go to the tax office, they are very helpful, the lady speaks perfect English who deals with foreign dividends.

15
You should put UK savings interest as a gross amount in the DA-1 and claim to offset the UK tax paid against the Swiss tax which will be levied (on the gross amount.)

My understanding is that "tax credits" in the UK are not recognised by the Swiss as tax paid by you therefore effectively there is no double-tax agreement. In theory, for non-ISAs you should declare the dividend amount net of the tax credit and make no claim for tax paid in the UK. You could try to reclaim the tax credits on the DA-1 if you think the Swiss tax people might buy it. I'm not sure how it would work if you've paid higher rate supplemental tax on the dividends. Dividends in the UK to non-residents shouldn't attract this tax, unless you've asked to be taxed as a UK resident. If for ISAs you actually receive the tax credit as part of the dividend, then you would need to declare the gross amount. I.e. in both cases you declare how much was actually received.

1. Dividenden aus im Vereinigten Königreich ansässigen Gesellschaften unterliegen gemäss innerstaatlichem

Recht keiner Quellensteuer.

2. Vor der Revision im Jahr 2007 des Doppelbesteuerungsabkommens zwischen der Schweiz und dem

Vereinigten Königreich (DBA-UK) hatten in der Schweiz ansässige Personen einen abkommensrechtlichen

Anspruch auf Steuergutschriften („tax credits“), wie sie im innerstaatlichen britischen Steuerrecht vorgesehen

sind. Aufgrund der Herabsetzung der Steuergutschrift im Jahre 1999 auf 1/9 im Rahmen einer Änderung des

internen Rechts des Vereinigten Königreichs, erhält ein Schweizer Investor seit dem Jahr 1999 jedoch keine

Steuergutschriften mehr oder - wenn es sich beim Schweizer Investor um eine Gesellschaft mit einem

Stimmrechtsanteil an der Dividenden zahlenden Gesellschaft von mindestens 10 Prozent handelt - nur noch

einen sehr bescheidenen Betrag. Deshalb ist man anlässlich der Revision des DBA-UK im Jahr 2007 beiderseits

übereingekommen, dass es sich nicht mehr rechtfertigt, eine Bestimmung deren Tragweite als Folge der

Änderung des innerstaatlichen britischen Rechts unbedeutend geworden ist, aufrecht zu erhalten. So wurde die

Abkommensbestimmung betreffend die Steuergutschrift aufgehoben. Das Recht auf die Steuergutschrift auf

Grund von Dividenden, die von Gesellschaften mit Sitz im Vereinigten Königreich an in der Schweiz ansässige

Personen bezahlt wurden, ist für Dividenden, die ab dem 6. April 2009 bezahlt werden, aufgehoben worden.