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New QROPS tax charge for 2017 – Will this change after BREXIT?

By Spectrum IFA - Topics: Belgium, BREXIT, France, Italy, Luxembourg, Netherlands, pension transfer, Pensions, Portugal, QROPS, Retirement, spain, Switzerland, United Kingdom
This article is published on: 20th April 2018

20.04.18

In the Spring 2017 Budget, the UK government announced its intention to introduce a new 25% Overseas Transfer Charge (OTC) on QROPS transfers taking place on or after 9th March 2017. The HMRC Guidance indicates that the OTC will not be applied in the following situations:

  • the QROPS is in the European Union (EU) or EEA and the member is also resident in an EU or EEA country (not necessarily the same EU or EEA country);
  • the QROPS and the member is in the same country; or
  • the QROPS is an employer sponsored occupational pension scheme, overseas public service pension scheme or a pension scheme established by an International Organisation (for example, the United Nations, the EU, i.e. not just a multinational company), and the member is an employee of the entity to which the benefits are transferred to its pension scheme.

It is also intended that the above provisions will apply to transfers from one QROPS (or former QROPS) to another, if this is within five full tax years from the date of the original transfer of benefits from the UK pension scheme to the first QROPS arrangement.

Nevertheless, it is clear that taking professional regulated advice is essential. This includes if you have already transferred benefits to a QROPS and you are planning to move to another country of residence.

It is important to explore your options now while you still have the chance as who knows what changes will come with BREXIT. Contact you’re local adviser for a FREE consultation and to discuss your personal options

EU Pension Transfer from the EU Institutions – It is EUr money

By Emeka Ajogbe - Topics: Belgium, EU Pension Transfer, France, Luxembourg, pension transfer, Retirement, Switzerland
This article is published on: 15th August 2017

15.08.17

Have you ever worked for any of the below institutions for less than 10 years? Go ahead, and have a look:

• European Commission
• European Council
• European Parliament
• EEAS
• European Court of Justice
• Eurocontrol

If yes, then carrying on reading this article, as an EU Pension Transfer will definitely be of interest to you. If not, then you’ll probably want to stop reading, unless you know someone in the aforementioned position.

To Whom It May Concern, if you have worked for less than 10 years at the EU Institutions (and have left), you will not have qualified for the gold plated, much coveted, EU Pension. I say much coveted, as no one is really making pensions like them anymore; as they are very, very expensive for the employer to maintain. Yet, they can be very, very good for you, the employee. Anyway, I digress. That is for another article.

As you will know by now, you have to work at the EU Institutions for at least 10 years (this can be interrupted, as long as the total is 10 years) before you qualify for the pension. If you leave before that time, then you are eligible for a severance grant which you can transfer into a scheme that has been approved by the EU. As it states in the EU Staff Regulations handbook:

“An official aged less than the pensionable age whose service terminates otherwise than by reason of death or invalidity and who is not entitled to an immediate or deferred retirement pension shall be entitled on leaving the service:

a. where he has completed less than one year’s service and has not made use of the arrangement laid down in Article 11(2), to payment of a severance grant equal to three times the amounts withheld from his basic salary in respect of his pension contributions, after deduction of any amounts paid under Articles 42 and 112 of the Conditions of Employment of Other Servants;

b. in other cases, to the benefits provided under Article 11(1) or to the payment of the actuarial equivalent of such benefits to a private insurance company or pension fund of his choice, on condition that such company or fund guarantees that:

I. the capital will not be repaid;
II. a monthly income will be paid from age 60 at the earliest and age 66 at the latest;
III. provisions are included for reversion or survivors’ pensions;
IV. transfer to another insurance company or other fund will be authorised only if such fund fulfils the conditions laid down in points I, II and III.”

The last 4 points are the most important to note as your money will not be transferred unless the approved receiving organisation adheres to those criteria.

WHY WOULD I TRANSFER?
Essentially, you have to, unless you like losing large sums of money. If you have not transferred by the time you have reached pensionable age, then your money disappears and is absorbed by the EU. If you die before you claim your money, then it is also lost. It will not be transferred to any beneficiaries as it is not a pension. When you leave, the amount that you leave behind is frozen and only increases at a very low interest rate; no further contributions are made on your behalf. So moving it when you leave allows you the opportunity to invest it into funds that could grow your money substantially over the years (depending on how close you are to retirement). For example, if you left the institutions at 40 years old, you would have at least 25 more years to grow your money. If you leave earlier, then you would have longer.

Moving it would also allow you better protect your financial future, make provisions for your partner or dependents/beneficiaries. It can be of benefit even if you decide to return to the EU Institutions.

There may be circumstances where it is not appropriate for you to transfer the money at that time, your particular situation will be evaluated by our pension specialist who will compile a report detailing the appropriateness of the potential transfer.

SOUNDS GREAT! WHAT NEXT?
We will conduct an evaluation of your situation and also the accumulation of your money at the EU. Once we have confirmed and agreed with you that transferring out is the right option for you, we will work with an approved provider to who complies with the requirements as stated above who will help set up your new pension. Then, as part of our ongoing service, we will review your pension and personal circumstances every quarter to ensure that you are always updated with the latest information. Even if you move countries, our service will continue.

We have established contacts with case handlers in the Office for the Administration and Payment of Individual Entitlements (the department responsible for calculating and transferring your money), and have developed the knowledge and expertise to ensure a smooth transfer, putting you in control of your money and helping you make the right decisions, as and when they are needed.

So, if you have no longer work for the EU Institutions and have less than 10 years’ service, you don’t like losing large sums of money, wish to protect your financial future, and potentially provide for your dependents/beneficiaries, then contact me either by email: emeka.ajogbe@spectrum-ifa.com or phone: +32 494 90 71 72 to see whether an EU Pension Transfer is suitable for you.

Le Tour de Finance heads to Switzerland

By Spectrum-IFA - Topics: Le Tour de Finance, Pillar 3a, Switzerland, Uncategorised
This article is published on: 21st September 2016

21.09.16

Le Tour de Finance, 29th September Nyon, Switzerland.

“Three ways to save tax”

 

What is Le Tour de Finance?

Are you interested in finding out how to make the most of your money in France, Spain or Italy? Do you have pressing questions about making international payments, pensions, tax, wealth or the healthcare system? Why not take the time and come to a local event, bring some friends and make it a great day out?

Le Tour de Finance is the financial forum for expats which will help you with a range of different financial products and services. Just as Le Tour de France takes a route throughout the regions of France, so too does Le Tour de Finance, but we also visit Italy, Spain, Switzerland and Belgium. We want to reach expats where you live so that you can seek advice particular to your local area. Tax advice, pensions, mortgages, healthcare, schools, business advice and making the most of your assets are just some of the subjects that expats need to know more about. Le Tour de Finance is the ideal opportunity to find answers to the most pressing questions facing people living in France, Spain or Italy.

The forum will bring together key players who assist expats settling or already living in these countries. It will also be an ideal opportunity to socialise by enjoying a free Buffet lunch and meeting people in similar circumstances in your neighbourhood.

As an expat, do you make the most out of your finances?
Come and join us for expert advice and to meet other like-minded expats in your local area. The event starts at 18.45 with a welcome drink, followed by some brief presentations from experts on a range of topics that could affect you now, or in the future. This engaging events ends at 20:30 with drinks and canapes and a chance to meet the experts and hopefully make some new friends.

Register for this FREE event or for further ­information, by sending an email with your full contact details to: seminars@ltdf.eu, register online or call +33(0)4 22 32 62 40

Where:
Le Caveau de Nyon
Château de Nyon, Place du Château,
1260 Nyon,Switzerland

When:
29th September, 2016
The event starts at 18.45 and ends at 20.30 with drinks and canapes.

What:
Brief presentations on a range of topics including: Tax efficient planning: for Frontaliers and Swiss residents; Why you need a Swiss Will!, Transfers between currencies: beat the bank margins!, Wealth management: seeking positive returns post-Brexit, QROPS- the latest rules on transferring UK pensions overseas, and what the advantages may be, How do the Swiss Pillars work, and how do I save taxes?, Swiss Mortgages- how they work, how to optimise to save taxes.

REGISTER ONLINE HERE

 

Wills in Switzerland

By Anton Taylor - Topics: Estate Planning, Switzerland, Tax, Uncategorised, Wills
This article is published on: 27th July 2016

27.07.16

A large number of expats try to put their affairs in order prior to leaving their home country and this often includes updating their wills. However, the updating of wills in your home country may not always be enough to ensure that your wishes are carried out, or that you minimise your exposure to Inheritance tax. In some cases, without a will in the country of residence, your children could be made wards of the state.

In Switzerland, as a general rule, the Estate of anyone residing in Switzerland is governed by Swiss material law, especially by the relevant provisions of the Swiss Civil Code, which definitely apply in the absence of a Swiss Will, notwithstanding the deceased’s citizenship, personal status or religion.

Swiss law, which was influenced by the Napoleonic Code, provides for various solutions, either mandatory or optional, and includes the so-called rules of “forced heirship” according to which some heirs (the spouse, the children and, in some cases, the parents of the deceased) are in any event entitled to a minimum portion of the Estate (similar rules apply in most countries on the continent and in Scotland).

Foreign residents in Switzerland may, by making a Will, direct that their Estate be governed by the law of their country of origin and, thus, avoid all or some of the rules set by Swiss law.

This choice of law does not affect the jurisdiction of the Swiss authorities and, depending on the deceased’s Canton of residence, inheritance tax must still be paid in Switzerland (taking into consideration the deceased’s Estate on a worldwide basis).

As regards American citizens, it may be wise to specify the law of the relevant US State (with which they have some connections, e.g. California), while British citizens should refer to “English law” (or “Scottish law” for the Scots) rather than UK or British law since it does not exist as such.

A Swiss Will must have the form prescribed by Swiss law. As a rule, it must either be entirely handwritten, dated and signed by the “Testator”, or made before a Swiss Notary Public (where the Will is actually drafted by the Notary and signed by the Testator in the presence of two witnesses who are often the Notary’s assistants).

Typed Wills or so-called “joint” Wills (one single Will made by two people) are prohibited and void.

Handwritten Wills may be drafted in any language, while Wills made before a Notary Public are usually in the local official language (i.e. in French in the French-speaking area of Switzerland, such as Geneva or Vaud).

Usually, Wills made with the assistance of a Notary Public are kept by them and sent to the local Court or authority upon the testators’ death. When Wills are made privately, it is wise to leave them in some place where they will be found easily, but they can be lost or destroyed. It goes without saying that any Will may, at the Testator’s discretion, be changed, amended, replaced or cancelled at any time by their authors and mere photocopies are not effective.

Under Swiss law, when there is no Will, the Estate is usually handled by the heirs (who must act jointly).

An Executor (or more than one) may however be appointed by Will and, upon the Testator’s death, will be required by the competent local Court (the Judge of the Peace in Geneva and Vaud) to accept this mission. The Will may include some specific instructions to the Executor who is generally entitled to deal with the Estate without any restriction.

The appointment of an Executor in a Will is recommended when some assets are held abroad (especially in the US, in the UK or in other common law jurisdictions), when some of the heirs are under 18 years of age or when the situation may prove complex for some other reasons.

Where no Executor was appointed, the local Court may, under some circumstances, appoint an Administrator to take care of the Estate and to protect the heirs’ interests, especially if they are not all known.

Anyone finding a deceased’s Will in Switzerland must send it to the local authorities. Probate proceedings include the notification of a copy of the Will to all the heirs and beneficiaries and, depending on the circumstances, to any relatives possibly entitled to a portion the Estate.

Usually, when the deceased was a foreign national, Swiss Courts require that the heirs submit a formal statement to be issued by a Notary Public in accordance with information that must be given by two witnesses who have no interest in the Estate and who must confirm the deceased’s family status, with a list of all relatives who may be entitled to the Estate. In the event of any doubt or if no one is able to provide the requested information, the Court may order that a formal notice be published in the official gazette, allowing any potential heir to challenge the Will within 1 year.

In some cases, the heirs also have to submit a legal opinion confirming the solution resulting from the application of some foreign rules (if selected in the Will) that are sometimes regarded as rather “exotic”.

Once the situation is clarified (and, where applicable, after a fiscal inventory is filed and inheritance tax paid), the Court issues a Certificate of Inheritance naming the heirs and allowing them to fully access the Estate assets and arrange for these to be distributed amongst them.

In Summary:

  • Non-Swiss should ask for their Estate to be governed by the law of their home country and state the country (i.e. will therefore avoid Napoleonic Code).
  • If it is not made before a Notary Public, the Will must be handwritten and married couple must write a Will each (so-called “joint-wills” are invalid in Switzerland).
  • A handwritten Will does not have to be witnessed and it should be kept in a safe place.
  • The appointment of an Executor (or more than one) should be considered.
  • It is helpful to attach a list of worldwide assets such as the name of the bank, branch and account number in which accounts are held, details of life policies or any other assets, as well as the contact details of people who could inform the heirs (such as Attorney, Financial Advisor or Accountant).

For more detailed advice or information on wills and estate planning for expats you should come to the Spectrum Seminar at Chateau de Nyon on 29th September. Further details will be sent closer to the event.

Spectrum IFA sponsors Freddie for a Day

By Chris Eaborn - Topics: Spectrum-IFA Group, Sponsoring, Switzerland, Uncategorised
This article is published on: 4th May 2016

04.05.16

Poster Freddie for a dayThis September would have been the 70th birthday of Freddie Mercury, legendary lead singer of the rock band Queen.

His final recordings were made at Queen’s Mountain Studios in Montreux, where Freddie also lived.

As part of a number of fundraising events, students of SEG, the Swiss Education Group, a leading hospitality education network, is hosting a fundraising weekend on 14th and 15th May in Montreux, entitled Freddie for a Day, to celebrate his life and raise money for the Mercury Phoenix Trust.

The Trust was established after his death and focuses on HIV awareness and prevention with a focus on young people in developing countries.

www.mercuryphoenixtrust.com/site/aboutus

Spectrum is a sponsor and one of our Swiss-based advisers Chris Eaborn, will be attending on our behalf.

Working in Switzerland and living in France – Pillar 3a

By Anton Taylor - Topics: France, Pillar 3a, Switzerland, Uncategorised
This article is published on: 25th November 2015

25.11.15

Getting the best of both worlds.

Many people working in and around the Lac Leman area make the choice to work in Switzerland but live in France. This has many advantages, such as cheaper housing and a lower overall cost of living. However, the downsides are that you fall into two separate tax and bureaucratic systems. Whilst this can be a headache at times, with a little planning it is possible to make the best out of both systems.

By living in France you would by default fall into the French tax system for everything but your income, which as it arises and is paid in Switzerland, is subject to the Swiss tax system.
The upside to the Swiss tax system is that many things can be offset to reduce your overall tax bill, such as the cost of commuting, clothing, loan interest, lunches if you are unable to get home and contributions to the Swiss Pension System. For a full list you need to contact a Swiss tax specialist, but the simplest way to minimise your tax bill is to contribute to a Swiss 3rd Pillar pension scheme.

These schemes allow an employed person to gain tax relief on up to CHF6,768 per annum 2015/16, the self-employed or those without an employer funded Pillar 2 can contribute up to 20% of their net income up to a maximum of CHF33,840. These deductions are straight off your top line of tax and as such enter the plans tax free.

There are two types of Pillar 3a plans, these are bank accounts and insurance schemes. The bank account has no obligation to contribute each year and in return you receive whatever the prevailing interest rate is or the banks own funds. The insurance scheme is a contract to pay until retirement, but includes a life insurance element and a guaranteed minimum performance and future cash-in values. The insurance schemes are also accepted for the amortisation of mortgage debt and, if you leave Switzerland, the policy can be converted and continued into a Pillar 3b that does not receive the tax relief but has all of the other benefits.

Use of an insurance Pillar 3a reduces your Swiss tax bill and also boosts your retirement income, so a win-win situation.

Once your income has been taxed, all other areas fall into the French tax system and are subject to Wealth Tax, tax upon interest and social charges.

If you are resident in France, you are required to pay Social Charges of 15.5% on all of your worldwide investment income and gains. Following a ruling in February 2015, if you are employed in Switzerland and paying AVS and medical insurance premiums, then you are not subject to French Social charges on income and gains and any charges paid in 2013 & 2014 can be claimed back. However the claim for 2013, must be submitted by 31st December 2015 or you will lose the right to a reclaim.

It is also important to note that elements that are tax free in other countries, such as ISAs, lump sums from pensions and premium bond winnings, are all subject to tax in France.

As far as your assets are concerned the best and only way to shelter these from punitive French taxation, either on an annual basis or upon death, is via the use of an Assurance Vie contract.

This protects your investments from wealth tax and provides a favourable tax rate upon drawing down of the assets. It can also provide for mitigation of the succession tax, as well as ensuring that the monies end up where you want them to.

A further issue is succession planning, and the fact that if you do not have a French will, then the French authorities will apply the French succession rules to your entire worldwide estate. So it is really important to get a French Will.

Finally the best way to ensure that you are making the best of both worlds is to take expert advice from a company that is licenced in both France and Switzerland such as The Spectrum IFA Group. As expats ourselves we fully understand the rules and laws for both countries.

Swiss taxes and various deductions

By Robbin Davies - Topics: Switzerland, Tax, Uncategorised, wealth management
This article is published on: 1st May 2015

01.05.15

This document is intended for information purposes only and does not constitute tax advice. The intention is to highlight that there are a number of financial planning opportunities available and that professional assistance in completing your tax-return is a very good idea. The Spectrum IFA Group can assist you with Pillar 3a tax-deductable savings, arrange a mortgage that is tax-optimised and help you with other forms of financial planning that are tax-efficient. We have certified accounting partners who speak English and will take care of your full tax return from 500 francs, including questions throughout the year.

The calculation of tax throughout Switzerland is based on the net income of the taxpayer. As in most countries, there are several deductions that can be made on your tax declaration. These will, in turn, reduce your taxable income, and therefore the amount of tax you pay.

Although deductions for the direct federal tax are the same throughout Switzerland, deductions at the cantonal and communal levels are regulated differently. Together with all local tax rates, there are frequently large differences between communes, and this should be borne in mind when deciding on where you wish to live, even in the same canton. Switzerland has been at the forefront of internet-based dissemination of information, and generally the relevant information on deductible amounts for your canton and commune can be found on the individual canton’s website, and frequently in English.

Clearly, to claim any of the available reductions in tax-liability, the necessary and supporting paperwork must be submitted with the tax return.

The following are the most important and frequently used, fully compliant and legal deductions.

Work related expenses: Employed persons can deduct work related expenses such as the cost for commuting to work. As a rule, bus and train passes (up to a certain limit) and a flat amount for bicycles, mopeds and scooters are all included under commuting expenses. Under certain conditions, the kilometres driven to the workplace can be deducted when one is using a private vehicle, but there are usually limits both in minimum and maximum distances.

Other work-related expenses include the cost for meals during the working day. Provided one cannot go home for lunch (i.e. there is a minimum distance from the place of work and the tax-payers domicile) these expenses can be deducted from income up to a certain maximum amount, which in turn varies from canton to canton. Additional deductions are also possible for shift or night work. For further work-related expenses such as the cost for work-specific clothing (such as suits), tools or other professional requirements there is a flat rate deduction. If the actual costs can be proven to be higher than the flat rate deduction (which would therefor require receipts to be attached with the tax declaration as supporting evidence) the tax-payer may often deduct the actual costs.

Payments into a pillar 3a: Payments into pillar 3a accounts are tax deductible up to the maximum allowed amount for those residents in Switzerland who have a taxable income. For employees with an employer-provided pension plan, the maximum allowed amount for 2015/16 is 6,768 francs. Self- employed people, and those without an employer-provided pension plan, are allowed to contribute up to 20% of their net income, up to a maximum of 33,840 francs in 2015/16. These maximum allowable deductions are reviewed every 2 years in line with inflation. The tax savings resulting from paying into a pillar 3a are that the taxpayer’s gross income has been reduced by these amounts and are ergo “tax fee”.

Bank vs. Insurance : It should be noted that there are two principal types of 3a. Those provided by banks, where there is no obligation to make a payment during any tax year, and those offered by insurance companies, where the contractual agreement is for a regular annual premium to be paid (this can be made monthly, quarterly, semi-annually or annually). The advantage of the bank 3a is that you are free to pay in or not, depending on your financial circumstances. One down-side is that there is no guarantee on the value of your policy at a later date, as it is always subject to the performance of the bank’s 3a funds. One of the great advantages of an insurance-driven product is that it comes with added life insurance, and also a guaranteed minimum performance and future minimum cash-in values. These insurance policies are also accepted for the amortisation of mortgage debt. On the downside, as there are certain charges taken out of the first annual premium at the very beginning, they should not be entered into without discussion with a qualified expert, and never to be taken for an anticipated term shorter than 5-7 years. Both types of product have federally-governed restrictions on accessing these funds before retirement age, although transfers to other retirement pots are permitted.

Interest Payments: Interest – for example for mortgages or on loans – may be deducted from income. This would apply only to interest and not for repayment of principal used to reduce a loan (amortisation of a mortgage for example). Leasing costs on cars may only be deducted when the individual is classified as self-employed.

Expenses due to illness and accidents: Certain expenses for medical services, which were not covered by your health insurance, can be approved as being tax deductible.

Insurance premiums: Premiums for health, accident, life and pension insurance can often be deducted up to a certain amount.

Reclaiming withholding tax: When bank or savings account interest is credited, under some circumstances only 65% is credited. In this case the bank transfers 35% of the interest to the tax authorities. On providing the account numbers on the tax declaration, the withholding tax is reimbursed. Withholding tax is applied only to accounts for which the amount of interest exceeds 200 francs. In addition to interest from accounts, interest from other sources such as bonds (including medium-term notes), lottery winnings (starting at 50 francs) and dividend payments are subject to withholding tax, but can often be adjusted to the individual’s marginal tax rate.

Contributions to political parties: Members of a political party may deduct contributions up to a ceiling.

Contributions to non-profit organisations: Donations to non-profit organisations can usually be deducted. Ask in advance.

Disability costs: People with physical or mental disabilities can make certain deductions for additional expenses. Various organisations throughout Switzerland offer free consultation on this matter as to what might be covered, and at local communal level they are also able to give contact details.

Alimony payments: Alimony payments for children and ex-partners can be deducted in full from gross income.

Charitable donations: Provided the charity is Swiss-registered, the minimum donation is 200 francs, but you may make donations up to 20% of your income.

Deduction for children: Generally a deduction can be made for every child who is under the age of 18, or at further education or still in their initial professional training up to age of 25.

Finally, and this is a typically « Swiss » feature

If you pre-pay your taxes you receive some interest: You can benefit from paying your taxes in advance. This is because the tax authorities pay interest on pre-paid tax payments. This interest is generally higher than the current low interest rates of banks. Clearly not everyone has sufficient liquidity to be able to cover a full year, but even agreeing to pay a partial sum in advance is a good way to make a little extra money.

The end of banking secrecy

By Daniel Shillito - Topics: europe-news, International Bank Accounts, Italy, Switzerland, Uncategorised
This article is published on: 26th February 2015

26.02.15

Swiss tax Info-sharing agreement signed on Monday

Matteo Renzi has tweeted how “billions of euros” can now return to the Italian State, thanks to his signature on an agreement with Swiss authorities on Monday February 23.

Italy and Switzerland have now formally agreed to exchange taxpayer information, as is already the case today between many other countries. This will effectively take Switzerland off Italy’s blacklist from last Monday, and end Swiss bank secrecy for Italian residents.

It is believed that around 85% of assets held by Italians outside of Italy, are in Switzerland (source: Il Sole 24ore)

The agreement comes after the announcement of a new Voluntary disclosure program applying from January 1st for Italian taxpayers.

As part of the new Voluntary Disclosure Program, Italian residents with Swiss bank accounts can voluntarily disclose their accounts and pay outstanding past taxes due related to the last 5 years, incurring less penalties than they otherwise would, and potentally relieving them of obligations to tax, related to the years 2005 to 2009. These concessions can only be obtained if disclosure is made via a commercialista before the deadline in September 2015.

Spectrum sponsors 23rd Swiss Classic British Car Show

By Spectrum-IFA - Topics: SCBCS, Switzerland, Uncategorised
This article is published on: 10th October 2014

10.10.14

Sunday 4th October was the 23rd Swiss Classic British Car Show in Morges, on the shores of Lake Geneva, Switzerland.

The Spectrum IFA Group has been a proud Main-Sponsor for several years and once again this years’ event was a real success with “shorts and tee-shirts” weather, which invariably seems to be the luck of this event!

Spectrum’s tie-in is partly because its two local advisers, Chris Eaborn and Robbin Davies, live nearby, are of British origin and both love classic cars. Also this is an event that has a huge economic impact on the town which is in the heart of the region where we have many clients.

The show itself was founded and has been run all of its 23 years by Keith Wynn, a British expatriate, and is a non-profit event with sponsorship paying solely for infrastructural costs such as posters and printing.

There is no entry fee whatsoever for exhibitors or visitors and the approximate 1,500 car-entrants come from all over Europe to display British cars and motorbikes over 20 years old (or more recent “special interest vehicles”). There is everything from eccentric enthusiast’s cars to “priceless” classics, all of which are parked unattended along the closed off quays of Morges for the pleasure of the mingling crowds with no problems whatsoever and only the lightest of security needed.

The show attracts around 20,000 visitors and the economic impact on the town through fully booked hotels, restaurants etc. is conservatively estimated at over CHF 1’000’000 of additional revenue.

So, for The Spectrum IFA Group, it is a fantastic opportunity to support one of the best car events in Europe (and arguably the very best featuring British cars!) whilst contributing to an event that has a highly positive economic impact to the area and brings pleasure to thousands.

Chris and Robbin had an excellent day and met many clients and friends who also seemed to have a great time.

[Gallery not found]

Making a Will in Switzerland

By Chris Eaborn - Topics: Switzerland, Tax, Uncategorised, wealth management
This article is published on: 12th September 2014

12.09.14

Wills in Switzerland

Swiss Law

As a general rule, the Estate of anyone residing in Switzerland is governed by Swiss material law, especially by the relevant provisions of the Swiss Civil Code, which definitely apply in the absence of a Will, notwithstanding the deceased’s citizenship, personal status or religion.

Swiss law, which was influenced by the Napoleonic Code, provides for various solutions, either mandatory or optional, and includes the so-called rules of “forced heirship” – according to which some heirs (the spouse, the children and, in some cases, the parents of the deceased) are in any event entitled to a minimum portion of the Estate (similar rules apply in most countries on the continent and in Scotland).

Choice of Law

According to the Swiss Federal Law on Private International Law, foreign residents in Switzerland may, by making a Will, direct that their Estate be governed by the law of their country of origin and, thus, avoid all or some of the rules set by Swiss law.

This choice of law (that is not permitted in the event of double citizenship including Swiss citizenship) does not affect the jurisdiction of the Swiss authorities and, depending on the deceased’s Canton of residence, inheritance tax must still be paid in Switzerland (taking into consideration the deceased’s Estate on a worldwide basis).

As regards American citizens, it may be wise to specify the law of the relevant US State (with which they have some connections, e.g. California), while Brits should refer to “English law” (or “Scottish law” for the Scots) rather than UK or British law since it does not exist as such.

Making a Will

If made in Switzerland, the Will must have the form prescribed by Swiss law. As a rule, it must either be entirely handwritten, dated and signed by the “Testator”, or made before a Swiss Notary Public (where the Will is actually drafted by the Notary and signed by the Testator in the presence of two witnesses who are often the Notary’s assistants).

Typed Wills or so-called “joint” Wills (one single Will made by two people) are prohibited and void.

Handwritten Wills may be drafted in any language, while Wills made before a Notary Public are usually in the local official language (i.e. in French in the French-speaking area of Switzerland, such as Geneva or Vaud).

Although it is not legally required in Switzerland, when a handwritten Will may predictably need, at some point, to be proven in the US, it is worth asking two witnesses to certify the Will at the time it is signed by the Testator, as this would be expected by a US probate Court.

Making a Will before a Notary Public is especially advisable when the mental capacity of the person making the Will could later be questioned (due to illness, age, potential influence of other people, etc.).

Usually, Wills made with the assistance of a Notary Public are kept by the latter who must send them to the competent local Court or authority upon the testators’ death. When Wills are made privately, it is wise to leave them in some place where they will be found easily, but they can be lost or destroyed. It goes without saying that any Will may, at the Testator’s discretion, be changed, amended, replaced or cancelled at any time by their authors and mere photocopies are not effective.

Appointment of an Executor

Under Swiss law, when there is no Will, the Estate is usually handled by the heirs (who must act jointly).

An Executor (or more than one) may however be appointed by Will and, upon the Testator’s death, will be required by the competent local Court (the Judge of the Peace in Geneva and Vaud) to accept this mission. The Will may include some specific instructions to the Executor who is generally entitled to deal with the Estate without any restriction.

The appointment of an Executor in a Will (and a possible Successor Executor – contingent in the event of the death or incapacity of the first one) is recommended when some assets are held abroad (especially in the US, in the UK or in other common law jurisdictions), when some of the heirs are under 18 years of age or when the situation may prove complex for some other reasons.

Where no Executor was appointed, the local Court may, under some circumstances, appoint an Administrator to take care of the Estate and to protect the heirs’ interests, especially if they are not all known.

Probate Process

Anyone finding a deceased’s Will in Switzerland must send it to the local authorities. Probate proceedings include the notification of a copy of the Will to all the heirs and beneficiaries and, depending on the circumstances, to any relatives possibly entitled to a portion of the Estate.

If the heirs suspect that the deceased was insolvent, they may reject the inheritance within 90 days. Alternatively, they may, within 30 days, apply with the local Court for a formal inventory to be drawn up (at their own expenses) and only accept the inheritance accordingly.

When the heirs accept (even tacitly) the inheritance, they immediately become the successors of the deceased for all the Estate assets and liabilities. They must act jointly and they are severally responsible for the deceased’s debts and obligations (including outstanding contributions or taxes owed in connection with undeclared assets).

Usually, when the deceased was a foreign national, Swiss Courts require that the heirs submit a formal statement to be issued by a Notary Public, in accordance with information that must be given by two witnesses who have no interest in the Estate and who must confirm the deceased’s family status, along with a list of all relatives who may be entitled to the Estate. In the event of any doubt or if no one is able to provide the requested information, the Court may order that a formal notice be published in the official gazette, allowing any potential heir to challenge the Will within 1 year.

In some cases, the heirs also have to submit a legal opinion confirming the solution resulting from the application of some foreign rules (if selected in the Will) that are sometimes regarded as rather “exotic”.

Once the situation is clarified (and, where applicable, after a fiscal inventory is filed and inheritance tax paid), the Court issues a Certificate of Inheritance naming the heirs and allowing them to fully access the Estate assets and arrange for these to be distributed amongst them.

IN SHORT:

  • Non-Swiss can (should) ask for their Estate to be governed by the law of their home country and state the country (i.e. will therefore avoid Napoleonic Code).
  • They must clearly state in the Will that this is what they want to do, g. “I direct that my Estate shall be governed by *** law”.
  • If it is not made before a Notary Public, the Will must be handwritten and married couple must write a Will each (so-called “joint-wills” are invalid in Switzerland).
  • A handwritten Will does not have to be witnessed and it should be kept in a safe place.
  • The appointment of an Executor (or more than one) should be considered.
  • It is helpful to attach a list of worldwide assets such as the name of the bank, branch and account number in which accounts are held, details of life policies or any other assets, as well as the contact details of people who could inform the heirs (such as Attorney, Financial Advisor or Accountant).

Creating or Updating your Will / Estate Planning – The Right Questions

If you died today, how would your Estate be handled?

  • Is there a Will and where is it?
  • Which debts should be eliminated?
  • Which assets should be sold (such as business or real estate)…
  • … and which ones should be kept (such as heirlooms)?
  • Who is to receive which assets (financial and sentimental)?
  • Are there any distribution clauses (e.g. to give your watch to your son/daughter when they reach age 18)?
  • Who is to take legal responsibility for any children under age 18?
  • Who is to assist the heirs and to ensure that your instructions will be implemented?

 Financial Planning

  • Did you know that, if you are a US citizen, Swiss banks can be required to freeze your accounts until all US taxes are declared and paid, thus a joint account could be frozen?
  • If a joint account holder passes away, the account can be frozen until Swiss taxes are cleared up, with the surviving spouse only able to present bills for living expenses to be paid.
  • If a married couple has children and one of the parents dies without leaving a Will, the child/children are deemed to inherit 50% of the Estate and depending on the Canton, may have to pay Inheritance Tax. In the Canton of Vaud, children may however be “gifted” up to CHF 50’000 per year each – tax free.

 Careful individual planning allows to identify and solve a number of issues like these.

We offer a free initial consultation should you wish to discuss these or other financial planning matters and should legal advice be required, we will work in conjunction with excellent English-speaking Attorneys and likewise have access to excellent English-speaking Accountants if pertinent.

This notice is for information purpose only and does not constitute legal or other professional advice. Any specific queries should be looked at individually with a professional advisor. This document may not be disseminated or published without written authority.