I have a Roth IRA in the US. Does anyone know what I would have to do to move the IRA to Switzerland with out the penalty's. I think it is called a third column?? I want the same kind of account as the Roth. I have the Roth though Wells Fargo, at least that is the name they are giving me this month.
Hi all,
Crivens, these freedom fighters are getting a bit bold these days!
On a more serious note, sorry, I can't really help except to say that it is called the 'Third Pillar' over here - any insurance agent (e.g. AXA Winterthur or an IFA) will talk you through the procedure.
I'm not sure what you mean by "move the IRA to Switzerland." The custodian for a US retirement account must be a US financial institution (which has registered with the gov't as a custodian). So, "no", you can't move the IRA to a Swiss bank. You also cannot merge an IRA into another retirement account.
More constructively: why would you want to do so? You can move the IRA to a US brokerage company (e.g. "Interactive Brokers") and invest in stocks (etc) anywhere in the world. You will find the brokerage and custodian fees dramatically lower than any in Europe.
I heard that capital gains on equities trading is not taxed in Switzerland. In the US, I believe the tax is increasing to 20% for capital gains and dividends. Is this correct?
No, both are wrong, though the first part may not matter for an IRA.
The last time I looked (a few years ago), "trading" (commonly defined as frequently buying/selling equities for short-term gain) is considered "professional" income in CH, thus subject to income tax. The criteria (how many trades per year makes the activity "professional") varies between the Cantons; see Toni Amonn's website or search on this forum.
However, that should be irrelevant (per the US-CH tax treaty) IF the Swiss gov't accepts the IRA as a retirement account (which they should).
In the US, an IRA pays no tax at all, either on capital gains or on dividends. So, you can't move the IRA to a Swiss financial institution, and it wouldn't gain you anything even if you could.
I had thought that whereas foreign tax-free quasi-retirement accounts can often (as in the UK case) be moved to the US, the reverse was not possible. A quick look on Google suggests this is incorrect, at least insofar as Canada (RRSPs) is concerned: http://www.ehow.co.uk/how_5928055_tr...-ira-rrsp.html
I agree there is usually little point in transferring such accounts unless they are too small to bother managing. You have answered this sort of question before: Retirement-IRA & Swiss Tax I know from http://www.aca.ch/joomla/images/pdfs/agefi8.pdf and from my own practice that -- except where specifically acknowledged otherwise by tax treaty -- foreign fund management (SICAVs, unit trusts...) can easily fall foul of US tax law and incur annual tax on accretions and possible double taxation later. There is a simplified Form 3520 system for Canadian RRSPs; whether that works for Third Pillar I can't say. I do know that in many or most cases expats ignore the rules and generally manage to stay beneath the radar because of ignorance on the part of provincial IRS auditors. What will happen now with draconian $10,000 level penalties I can't say.
But this is not unique to the USA. In Britain draconian penalties in the thousands of pounds are being levied for innocent timing and characterisation errors: http://www.hmrc.gov.uk/about/new-penalties/
http://www.bytestart.co.uk/content/t...s-regime.shtml
http://www.barnesroffe.com/about/blo...proportionate/
and lots more easily found on Google.
Since tax authorities talk to each other and learn from each others' experience, can Switzerland be far behind? Limited only by the proportionality rules of the ECHR, something the IRS is immune to.