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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4931
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I am a Swiss national and have been working in the UK for 6

Resolved Question:

I am a Swiss national and have been working in the UK for 6 years. I have been taxed as ordinarily resident but non-domiciled on the remittance basis. I will be transitioning this year to a normal UK all-source basis. The question is, I earn CHF 30K as a director of a Swiss company, on which I pay Swiss tax (joint return filed with my husband, whereas in the UK I file an individual return). How should I treat this for the purposes of my UK return? And should I continue to file the residency supplemental pages for the self-assessment as a dual resident?

thank you!
Submitted: 3 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 3 years ago.
Hello and welcome to the site. Thank you for your question.

You should complete the supplementary pages SA109 to cover residency and domicile status and also complete supplementary pages SA106 - Foreign.

You claim foreign tax credit relief against foreign tax suffered in Switzerland on your earnings from that country.

More information on SA106 can be found here

http://search2.hmrc.gov.uk/kb5/hmrc/forms/view.page?record=EZbpjD2hV2M&formId=3188

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.


Customer: replied 3 years ago.
Thank you, XXXXX XXXXX helpfull. What i need to know is what the foreign tax credit relief is for Swiss income (employment as a director) in order to complete the answer. What is the rate that i can claim? I can't find it on any of the HMRC links. And will i be given relief on declaration or do I have to reclaim tax already paid to the Swiss tax authorities?

Thank you.
Expert:  taxadvisor.uk replied 3 years ago.

Thank you for your reply.

You do not have to calculate your Foreign Tax Credit Relief yourself. HMRC will do that for you provided you complete the relevant boxes.When you complete section dealing with Foreign Tax paid on employment, self-employment and other income on page F6 of SA106 just input amount of foreign tax deducted in column C.

You will be given relief on declaration when you compete your tax return and you receive a copy of SA302 - Summary tax calculation.

 

You will not reclaim the tax from Swiss Tax authorities but payment of it would be reflected in your overall tax payable to UK tax authorities.

I hope this is helpful and answers your question.

Expert:  taxadvisor.uk replied 3 years ago.

Hello

I notice you have viewed my response to your further question on foreign tax credit relief (</spanCustomerLast Viewed on 13/03/2014 at 22:20).

Just checking to see if you have any issues relating to your question that I may not have addressed.


Please let me know if I can be of further assistance.

If you are happy and there are no more issues I will appreciate if you would kindly rate the service I provided to ensure I get credited for it.

Customer: replied 3 years ago.
Thanks for this and sorry for the slow response. I have been travelling internationally and so have had long periods offlline. I promise this is the last question, then we will close this out: i have read all the relevant notes you have directed me to and although i know HMRC will calculate the tax for me, i want to be able to plan/accrue for the correct amount. I understand that there is a maximum pct allowable for FTCR depending on the type of income and country it was earned in, defined by the treaty, and I'd like to know what that is for Swiss income. Also, as mentioned in my first email, the amount of Swiss tax that i have actually paid is part of a joint return with my husband in switzerland and so is a blended rate. Do i just pro rata that average rate for the purpose of UK tax declaration, and apply that rate to my declared swiss income? Thanks again.
Expert:  taxadvisor.uk replied 3 years ago.

Thank you for your reply.

Basically, the amount of Foreign Tax Credit Relief (FTCR) that can be claimed on an

item of income is always the smaller of:

• the amount of foreign tax paid, or allowed by treaty, and

• the amount of the UK tax chargeable on that item of income.

More information on this is covered here

http://www.hmrc.gov.uk/helpsheets/hs263.pdf

An agreement on taxation with Swiss authorities came into efect on 6 April 2012

More information on it together with SEES SA Tax Calculator can be found here

http://www.hmrc.gov.uk/manuals/sammanual/sam121615.htm

You should calculate your share of Swiss tax paid from the joint return in switzerland and report that on your UK tax return.

I hope this is helpful and answers your question.

taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4931
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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Expert:  taxadvisor.uk replied 3 years ago.
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