DT Agreements: Switzerland - Income from a UK source paid to a resident of Switzerland
Swiss Investment Funds (Article 27(9))
What a Swiss approved investment fund is
An approved investment fund in Switzerland is a fund as defined in Article 2 of theFederal Law for Investment Funds (loi fédérale sur les fonds de placement).
How you recognise Swiss investment funds
You will be able to recognise an approved Swiss investment fund from the answer toquestion 9[?] on the claim form. If it has not already been done, note the file coverInvestment Fund. If you have any doubts about the status of the fund, or theclaimant is described as an Anlagestiftung you should refer the file to TechnicalAdvice Group.
Who makes claims for Swiss investment funds
Under the UK/Switzerland Double Taxation Convention the fund managers can make claimsfor the members of the fund who would be entitled to relief under the Convention in theirown right.
Certification of claims made by Swiss investment funds
Each [double taxation] claim by a manager of a fund must have a formSwitzerland/Investment Fund attached to it. Both forms must be certified by the SwissFederal Authorities, but certification by the Cantonal Administration is not necessary.
How to calculate the repayment due to a Swiss investment fund
You should calculate the repayment due in the normal way and then multiply it by thepercentage shown at item 9 on the Switzerland/Investment Fund form. For example, you haveinterest of £5000 for 2002/03 and the percentage figure at item 9 is 24.78%.
- Total payment of tax due is £1000
- Total payment due is £1000 x 24.78% = £247.80
What income can be claimed by Swiss investment managers
The income of an investment fund could include UK interest and dividends as well asforeign dividends and interest. However, the Investment Fund managers can only make claimsunder the dividend and interest articles of the Convention. There is no relief from UK taxsuffered on foreign income, and relief on FOTRAs can only be given under the interestarticle of the Convention. If you receive a claim which includes non-DT income, pleaseseek advice from Technical Advice Group.
Why we can accept claims by Swiss investment fund managers
Relief to managers of approved Swiss investment funds is given by Article 27(9) of theConvention. This article provides that any relief given will be subject to any conditionsthat the relieving country wishes to impose after consulting the other country. The UKRevenue has agreed with the Swiss Revenue that it will give relief to managers of approvedInvestment Funds on that element beneficially owned by Swiss resident members of the fund.The fund managers and the Swiss Revenue can check this from the number of couponspresented for payment without deduction of Swiss withholding tax with declarations ofnon-residence in Switzerland. The declaration by the fund manager includes an undertakingwhich protects the UK Revenue from any overpayment.
What to do if you receive a claim from a Swiss investment fund without acertified form SWITZERLAND/INVESTMENT FUND attached to the claim
You will need to write to the fund manager and ask the fund manager to complete form SWITZERLAND/INVESTMENTFUND and get it certified by the Swiss Revenue authorities.