Haha fantastic! Congrats!!
Hope to join the club soon. 
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Thanks! Good luck joining the club 
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As is well known, the USA has an inheritance tax, which also applies to us if we hold American securities in a Swiss custody account.
I have now opened an Interactive Brokers account and this means that non-US securities are also held in the USA.
Does this mean that the total amount invested with IB is relevant for US inheritance tax? Or does this only apply to American equities, ETF’s and funds?
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Only american, but you’re probably at IB UK anyway, not at the US one.
As far as I know, the US Estate Tax applies to securities issued in the US. You can see which securities were issued where by the ISIN. If the first two characters of the ISIN are “US”, then it’s been issued in the US.
Broker makes no difference here. You can hold US securities at Swissquote and European securities at IB. The difference are broker fees and the presence or absence of Swiss stamp duty.
Finally, a person domiciled in Switzerland at the time of death, can count on an $11 million exemption, at the time of writing this post, due to the US-CH tax treaty.
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It was discussed here. As long as you’re a tax resident of Switzerland the treaty has a exemption above $60K as Bojack mentioned in the previous relply
Hope it helps
More info here in this thread
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Sorry to resurrect this - but is this even possible?
I mean transferring funds into IB via Transferwise or Revolut, i.e. a non-bank account (which kind of doesn’t have your name next to it).
Reason I’m looking into it - I have some money sitting at home country (with my parents account currently, source are EUR) and I had an idea to load it into my IB and buy VT.
Apparently if they sent it to my banking account in CH, that would be taxed as a gift at 5/6% (+25% Zuschlag).
Has anyone succeeded with such a transfer as above?
Edit: I guess this could also technically be seen as tax evasion - am I right? 
And in general, if I were to transfer any money from my own foreign account to my CH bank account - that would be taxed as income, correct?
(Went quite offtopic there 
)
Depending on the currency, a Revolut or TransferWise sending account will be in your name as the account holder, even though it might be a non-bank and/or E-money account.
On the other hand, transfers from a third-party account to a brokerage account are not a good idea in my opinion.
No reason to do so - unless you want to try to “obfuscate” the origin / source of these funds?
If you have an account with IBKR UK, you should be able to transfer EUR to IBKR directly - as an inexpensive/free SEPA transfer.
How much? It shouldn’t be much if coming from your parents, should it?
Also, you might want to check whether any and which amounts are exempt.
No.
Transfers between your own accounts are not taxable, whereever they may be located. Of course you did already include these foreign accounts in last year’s tax return, didn’t you?
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I think when you signed up for IBKR you had to confirm somewhere that you will only invest your own money with your account, or something like that. So either you are evading taxes, or you are breaking the terms of your broker…
But the Schenkungssteuer doesn’t generally apply for parents-children. So you should be fine, to just transfer that money to you first.
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It seems to do, depending on canton…
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Few questions:
- Are commission fees on US shares paid in USD or base currency?
- IB (and possibly other brokers) do not allow share transfers in single name accounts into joint IB accounts. Is there a non-complex work around?
- Can you transfer USD from REVOLUT to IB? I was thinking for small amounts this might be cheaper than IB FX cost
Thanks
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So I just received my first dividend in IBKR and it looks like the W8BEN thing worked, 15% got withdrawed.
The other 15% I’ll have to get from DA-1 in my tax declaration next year, right?
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Only Swiss Intermediaries impose an additional tax of 15% on US dividends received by Swiss beneficial owners and submit the amount to the Swiss tax authority. Therefore, there are “no other 15%” withholding tax which you could claim with the DA-1.
With IB as a foreign broker, you can ask the refund with DA-1
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DA-1 allows you to reclaim both “Zusätzlicher Steuerrückbehalt USA” (withheld by Swiss intermediaries, so not IBKR in this case) as well as apply for tax credit for withholding tax, if applicable:
“Dieses Formular dient einerseits als Antrag auf pauschale Steueranrechnung für die im Jahre 2018 fällig gewordenen Dividenden und Zinsen und anderseits als Antrag auf Rückerstattung des zusätzlichen Steuerrückbehaltes USA, der in der Schweiz vom Ertrag amerikanischer Aktien und Obligationen abgezogen worden ist.”
As I understand it, while indeed no “Zusätzlicher Steuerrückbehalt” will be withheld in Switzerland, the US is one of many countries from which withholding tax on dividends can be credited against domestic taxes.
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Yep, right.
Picking on the details here, but for clarity you won’t get “the other 15%”, but you get a credit thereof on your swiss taxes (due to double-taxation treaty CH-USA).
“This detail” helps to understand and differentiate with the “refund” given by CH of the “Zusätzlicher Steuerrückbehalt USA” withheld by Swiss brokers.
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I had 38 CHF and 0.09$ in my IBKR. Today I noticed that IBKR made a FX change on 2nd January witout fees, now I don’t have any USD anymore.
Why are they doing this? Is this automatically every month for balances below a certain amount?
Same here… Last entry:
FX Translation P&L -0.02
I don’t think it is a charge but a virtual position. I understand that against my main currency, I lost 0.02 USD with the last currency movements…
“IB will act to automatically convert non-Base Currency balances only where the balance is nominal (i.e., below USD 5 equivalent and assuming no subsequent trade activity through settlement)” (https://ibkr.info/node/2059)
This is a pretty customer friendly policy IMHO, considering that otherwise you’d have to spend at least $2 to convert.
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Pretty nice!
Do they do this every month?