SAM121615 - Returns: individuals returns: Swiss Tax agreement

Background
Tax return processing
SEES SA Tax calculator 

Background

An agreement on the taxation of Swiss investments held by UK residents came into effect on 6 April 2012. Under the terms of this agreement tax is deducted at source by the Swiss Authorities and the taxpayer can either

  • Use the Swiss tax deducted as a (refundable) tax credit against their UK liability
Or
  • Treat the Swiss tax as satisfying the total UK liability on that income

Note: The UK/Swiss tax co-operation agreement ended on 31 December 2016, but remittance basis users may still need to claim credit for, or a refund of, tax deducted prior to that date if the income is remitted in a later year. There is therefore a limited number of customers that this guidance will relate to.

Tax return processing

If the taxpayer elects for a refundable tax credit, they are instructed to return the Swiss tax as Special Witholding Tax in column D on page F3 of the SA106, then the tax return can be processed as normal and no further action is required.

If the taxpayer elects for the Swiss tax to cover their UK liability to tax on the Swiss income, they will make the claim in the ‘Additional Information’ box on the tax return. In these cases, the automatic SA tax calculation will not produce the correct result therefore the SEES SA Tax calculator has been updated from 2012-13 to deal with these cases.

Note: If the return is amended, the Swiss tax credit will have to be recalculated using the SEES SA Tax calculator.

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SEES SA Tax calculator

This calculator can be found in Excel under SEES, Full tax calculators, 2013-14 SA Tax Calculator (Main). Capture all the details of income on the SEES SA tax calculator, including details of all foreign income, following the steps below

1.
  • In Excel, select SEES, then Full Tax Calculators, then 2013-14 Full tax calculators and enter the appropriate details

2.
  • Use the ‘Swiss Tax Agreement’ tick box on the Foreign Income tab (under Box 5) to reveal the ‘Swiss Tax’ tab

3.
  • On the ‘Swiss Tax’ tab, enter the details of the taxable income (from column F on page F3 of the SA106) and any Special Witholding Tax claimed against this income

 

Note: Swiss interest will be in the rows of boxes above boxes FOR 3 and 4 and can be identified by the ‘CHE’ country code in column A. Swiss dividend income will be in the rows of boxes above boxes 5, 6 and 7 and will have a country code of ‘CHE’ in column A . You will need to distinguish between Swiss dividends that qualify for UK dividends that qualify for UK dividends tax credits (totalled in box 6 only) and those that do not (totalled in boxes 6 and 7)

4.

After all details of the Swiss income have been added on this sheet
  • Select the ‘Add pages’ tab and select the ‘Calculate Now’ button

Note: In addition to the ‘SA302’ and ‘CRC’ sheets that normally appear, the ‘Swiss Tax Credit’ sheet will appear and will give full details of how the Swiss tax credit has been calculated. The Swiss tax credit will have been added to any Foreign Tax Credit Relief on the ‘SA302’ calculation

5.
  • Print the ‘SA302’ and ‘Swiss Tax Credit’ sheets and take a copy,

6.
  • Issue one copy of each to the customer/agent with a covering letter and file the other copy with the return

7.
  • Using function CREATE RETURN CHARGE, update the customers record using the figures from the ‘CRC’ sheet in the SEES calculator

8.
  • Make an SA Note of your actions