Heyo! I am about to leave Switzerland and follow my wife to the USA for about 2 years. We are both Italians. We’ll likely come back to Europe, but we don’t know where (academic wife, that’s quite a gamble).
I’ve worked here for about 6 years and I hold a C permit. I have more or less the following assets lying around:
- 3rd pillar with VIAC;
- UBS bank account with about 50k;
- an Interactive Broker account invested with VT;
- the 2nd pillar I built up over these years.
To the best of my knowledge, since I am moving of the EU, I could cash out both 2nd and 3rd pillar.
Alternatively, I could open a vested-benefit account and leave both invested in Switzerland.
In the end, I think I would never need that cash apart from buying a house. Changing the domicile of the IBKR account should not be hard. I am not sure what to do with my UBS account. I know I would need to pay some extra fees for being abroad. But I also know that UBS would likely close my account if they figure out I hold a US Visa. I had the idea of investing a substantial part of it, leaving a few thousand on the account and hoping no one notices it.
What would be, in your opinion, the most sensible way to handle this relocation from the financial point of view? Thank you very much in advance for all the inputs.
Keep 2nd/3rd pillar invested at Viac and ValuePension. Close the UBS account. That’s what I would do.
If they become US tax resident, that’s probably a very bad idea (those are PFIC afaik).
To get the advice of a lawyer/tax advisor specialised in Swiss and US tax laws.
I would just check how the 2nd pillar and 3rd pillar would be handled beforehand with the US
Another thing, there are capital gain taxes in the US. It might be thougtful to sell all your assets on day-1 of arriving in the US and rebuying on day +1, as to reset the cost basis of your assets.
I would close the UBS account as soon as you have the banking package , just a hassle in the end, no need to keep it.
The first 2 issues should be checked with a tax specialist in the US/Switzerland.
Thanks for all the tips. I had no idea of this PFIC issue. I will become a tax payer in the USA, so it might become an issue. About selling my position to reset the cost basis…they are in the red zone. Would it still make sense?
Reseting the cost basis would only make sense if the new avg. price is higher than the previous one.
In this case, would it make sense to cash everything out and re-invest in something USA-domiciled (e.g., VT) or should I just accept the burden of a troublesome tax declaration?
Most of the US expats I know seem to avoid 3a because of that, Declaration seems more than cumbersome (I guess it’s meant to be a deterrent).
So yes, probably US domiciled funds.
This was more or less my plan. However, I got in contact with VIAC and they mentioned they do not offer 2nd or 3rd pillar to people domiciled in the USA
I would cash out 2nd and 3rd pillar. You might even be able to get the whole second pillar back and not only the extra mandatory part.
2P if left in CH will earn you 0% interest. I’d much rather invest it myself personally. Should be quite a nice chunk of money. Check if and how it’s taxed in the IS, everywhere is different and you may or may not have to pay anything on it.
My goal was to keep the 2nd pillar invested. Maybe not optimally, but should lead to some increase over time.
Just to add to the discussion, while VIAC does not allow to US persons to keep 2nd/3rd pillar account, it seems that finpension does it
And you don’t mind potential pfic issues?
I totally do, unfortunately xD Was just adding this info to the table