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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15885
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I am currently working in switzerland(Indian origin)

Customer Question

hello, i am currently working in switzerland(Indian origin) for the last 5 years and my wife(also Indian) has moved to the UK last year, based on which i have received a dependent visa for UK. will i be taxed on my savings/capital gains from my earnings/savings in th epast 5 years in switzerland when i move to the UK?
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.
Hi.

When did you last live in the UK, if at all?
Customer: replied 2 years ago.

i never lived there. i only go there like twice a month on weekends to visit my wife

Expert:  TonyTax replied 2 years ago.
Thanks.

Leave this with me while I draft my answer. It will take a while.
Customer: replied 2 years ago.
I plan to invest my savings in buying a property in london when i move there. Hence i need to understand the tax implicatios of moving money to the uk
Expert:  TonyTax replied 2 years ago.
Hi again.

For tax purposes, based on the information you have provided me with, you are not a tax resident of the UK by reason of the third automatic overseas test. See paragraphs 1.7 to 1.9 of RDR3 here. Quite apart from that, you have never been a tax resident of the UK so the temporary non-residence rules won't apply to you. The fact that you have a UK visa is not relevant.

The temporary non-resident rules which you can read about here, here and here only apply where an individual has previously been tax resident in the UK. You won't have to pay UK tax on foreign income and gains earned before you become a tax resident of the UK.

I hope this helps but let me know if you have any further questions.
Customer: replied 2 years ago.

ok to get this absolutely clear. capital gains which i received here, will not be taxed when i move the entire sum to the UK for investing in a house?

Expert:  TonyTax replied 2 years ago.
That is correct so long as you don't make those gains while being a tax resident of the UK.

It would be unfair to tax an individual on income and gains made before they became a tax resident of the UK.
Customer: replied 2 years ago.
Ok. So from when on after i move to the uk do i become tax resident in the uk. Im asking this because being an indian i would be asking the swiss govt to cash in my OASI account which is the mandatory pension scheme for everyone residing here. Once i de register from switzerland it takes 6 months for the swiss authorities to pay this accumulated pension amount. If i get this amount from the swiss govt after i become a tax resident in the uk then will this amount be subject to taxation in uk?
Expert:  TonyTax replied 2 years ago.
Let me take a look at that and I'll get back to you in a bit
Expert:  TonyTax replied 2 years ago.
Hi again.

Up to 5 April 2011,Extra Statutory Concession A10 covered lump sum payments to UK tax residents from foreign pension funds. From 6 April 2011, ESC A10 has been enshrined in tax law. To the extent that that a pension lump sum was derived 100% from foreign service, it won't be taxable in the UK. Take a look at the notes here.

As far as your situation is concerned, your lump sum won't be taxable in the UK even if it is paid after you become UK tax resident by reason of paragraph 2 of Article 18 of the UK/Switzerland tax treaty which you can read here.
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15885
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
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Customer: replied 2 years ago.

perfect thank you very much tony

Expert:  TonyTax replied 2 years ago.
Thanks.
Customer: replied 1 year ago.

hello tony

Customer: replied 1 year ago.
Hello tony,
With regards ***** ***** above im wondering if i should keep a tab on the number of days i visit uk. Is the 91 day stay rule in uk apply to me as well
Expert:  TonyTax replied 1 year ago.
You should keep a record of your visits to the UK. Try to limit the days in the UK to 90 or less in a full tax year.
Customer: replied 1 year ago.

Hey tony, i am actually thinking of moving to the UK from January onwards. im guessing by the nember of trips i have planned till december end i woulod have spen atound 70 days in the UK since march. Does this mean that i cannot move to the Uk permanently from January and that i have to move in April only?

Expert:  TonyTax replied 1 year ago.

Read section 5 of RDR3 from page 59 and, in addition, at Tables F and G on pages 60 and 65 respectively of RDR3 here. 70 days in the UK between 6 April 2015 and 31 January 2016 should be fine.

Customer: replied 1 year ago.

hey tony,

the example in section 5 is of someone leaving UK to another country for the split year. whereas im the opposite case. am i looking at this correctly?

Expert:  TonyTax replied 1 year ago.
Page 59 from paragraph 5.26.
Customer: replied 1 year ago.

hey tony,

just to restate the facts, i tried to read the above but i couldn't keep track of things. to clarify again since my wife lives in the UK the house which we moved in from June 2014 to August 2015 were on both our names. so i had a house in the UK for that period, we moved to a different house a few months back in aug 2015 which is only under my wife name. so I'm not sure if i meet the only homes test. i have a full time home in switzerland of course.

also since time has moved since the last time we spoke, i have spent 85 days in the UK so far. correct me if I'm wrong but my methodology for counting no of days in the Uk has been as follows: if i go to london say today 25th Dec Friday evening 7PM and leave on the 27th Sunday 7PM flight back to geneva, then i have counted this as 3 days. can you verify if this is the correct counting methodology.

sorry to bother you on christmas but pls understand my plight, I don't know if i can safely visit my wife in the UK from hereon till end of the tax year without paying a heft capital gains

i have resigned from my company and would be serving a gardening leave from now on till March 2016. till then i would be considered an employee in switzerland. my work permit here in swiss expires on march 2016 as well. i will receive my shares principal(taxed here) and capital gains on it which will be paid out to me from Jan 2016 to March 2016. i wish to move to the UK as soon as possible. please can you help.

Expert:  TonyTax replied 1 year ago.

A day is counted as a day in the UK if you are in the UK at midnight at the end of that day. So, if you arrive in the UK at 7pm on 25 December and leave at 7 pm on 27 December, you will have spent 2 days in the UK, the 25th and 26th of December

See Table F on page 60 of RDR3. The number of days is reduced for the sufficient ties test if you come to the UK part way through the year. You must not meet the sufficient ties test between 6 April and your permanent return to the UK. One of Cases 4 to 8 will need to be met to qualify you for split-year treatement. Start on page 59 of RDR3.

See paragraph A11 on page 87 (Annex A) for one definition of a home. Not having ownership of a property doesn't necessarily mean it isn't your home.

The averaging of days spent in the UK over a rolling four year period has not applied since 6 April 2013 when the SRT came into force.

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