Swiss / UK TAX question

this question cannot be answered without knowing how long, and for how much of each week/month, you intend to remain outside of the UK.

tim

There will be no liability as a result of transferring from a swiss to a UK bank account. The tax liability will take place when you earn the money.

It depends how long you plan to spend in Switzerland.

and in any other country where he is liable to tax on his world wide income.

He has told me in a reply to my last post: six months (perhaps longer) and I haven't got around to replying, so I'll do it here.

If he is only away for six months he will not lose his UK tax residency status and will thus be liable to pay Swiss and UK taxes on the money. Double taxation relief will stop him paying tax twice, the effect is that the tax payable will be whichever country's tax bill is the higher.

I think that he can choose whether to pay Swiss NI or continue to pay UK NI. He doesn't pay both. I am told that for a temporary stay, Swiss NI is a good deal as if you are there for less than a number of years (5 perhaps) they give you a refund of your pension contributions when you leave. I have no personal experience of this so it could be an urban myth.

If he want's to lose his UK tax residency and save the aggro of dealing with the DT relief forms, he needs to stay outside of the UK (not necessarily still in CH) until 06/04/07, which gives him a problem as he has to do his 05-06 return by 30/01/07 - Oops (I think that it is possible to send the tax return back before the due date with a note saying that you don't know your status for the year yet and if there is a eventually a liability they won't fine you, but they will charge the interest).

It may be possible to avoid the CH tax and only have the UK liability, but this depends on the Swiss tax system.

HTH

tim