2nd and 3rd pillar after leaving Switzerland

Banks, Insurances & Third Pillar
1

Hello,
from a few years in Switzerland, I built up a small amount of cash in a 2nd pillar (now “Libre passage” at Retraites populaires - no growth, high fees), as well as in 3rd pillar (post savings).

Since several years I now live in UK. I am not a Swiss citizen.

  • If I understand correctly, extracting the $ from switzerland now would mean that I would be liable to pay taxes on it (either in Switz or in UK, or potentially both)?
  • I emailed a few banks mentioned on this forum to understand if within the 2nd/3rd pillar wrapper, I could move this cash to a new account which would let me buy an ETF. Because I am international (resident and citizen) they told me this would be not be possible. (Similarly Postfinance won’t let me change to their index-tracker 3rd pillar). Do you know of any Swiss bank that would let me do this?

Thanks in advance and kind regards,
yaw

2

I am afraid that your situation of expat not in Switzerland anymore make the possibility to transfer the found from one bank to the other difficult.
Why don’t you cash the 2nd and 3rd pillar?
It will induce some tax but it is much lower than the tax you had on your income while in Switzerland. Unfortunately I am not competent to tell you what you would have to pay in the UK in that case.
It will give you the freedom to invest the money in the best solution for you.
If in the future you come back in Switzerland then you will have no second pillar but this is not a big deal. You can buy it back with the cash you have and it is tax deductible (YES, you would have made twice the deduction). The only limitation is not to cash one year and buy back the next one. I expect that you have to wait 5 years to benefit of the tax deduction.
The 2nd and 3rd pillar products are so bad that I would never keep them if there would not be a tax advantage.

3

Thanks for the quick reply bamboo.

In my understanding, transferring the cash out of Switz, to UK, it would count as “income” for this year in UK (I am not sure 100% sure about this). If this is the case, given the way UK taxation is set up, it would be taxed at 40% which is a pretty big hit :confused:

4

62 posts were merged into an existing topic: Leaving Switzerland and withdrawing 2nd pillar (pension)

23

HI Everyone,

Raising a question on this topic rather than creating a new one. After 9 years working and living in Switzerland, I am moving back to a EU country for a new job. My plan is to split my pillar 2 into 2 different fundations at Finpension. However I am wondering how to do DCA investment rather than having the full amount invested on day 1. Can funds be transferred first into “compte libre de passage” and be invested with DCA approach?

I did not find anything on this so far.

Thanks for the valuable input.

24

Can’t you use a custom strategy and change it over time?

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25

As far as I know you have 1% in cash. The rest in your equity / bond / commodity funds selection or in money market fund. You can then keep moving money gradually from money market fund to the funds of your choice.

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