Capital gains for bonds instead of dividends?

I was thinking lately to something which would convert dividends from bonds to capital gains, but I am quite sure it would not work, but maybe anyone would have more experience with it.

So, if for example I am buying a bond etf after the interest is distributed (lower price) and would sell it in 6 months, before the dividends are distributed (hopefully I can find etf which pays interest each 6 months or each year), I would get the etf dividends as capital gains. Then I will find another bond etf in similar setup and do same… At the end I am selling before the dividends are distributed, so I capture the capital gains for it.

But probably it is obvious for the tax office what I am doing and maybe they put me to pay the dividends tax or worse to give me the label of professional trader.

Anyone did something like that or has some insights?

Hahahahaha of course it is. They’ll just tax you on the income you avoided (but no professional trader status, and no other penalties)- and the holding period here was almost one year.

No reason why this idea wouldn’t work for stock ETF’s too (as long as you find the right combination of dates), but you’d still get hit with the taxes.

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Principally doable, but with mentioned risks: Tax authority might claim you do it on purpose to avoid tax (which is illegal and will be rectified for tax purposes, see linked article from @flenker) or if it leads to too many transitions they might indeed discuss professional trader status with you.

However, in general, avoiding interest and dividend pay-outs is absolutely feasible as long as you do not push it too far. It also significantly seems to depend on the amounts involved, as Swiss tax authorities absolutely do not care about the small fishes.


Merely illegal, but importantly: not criminal.

I love that in Switzerland that speeding is a crime but tax evasion is an administrative offence.

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And so should we all. One can cause death, the other is merely a small financial thing (with a penalty mind you).