I’ve been following this community for a while but this is my first time posting.
I am considering pulling the plug in six months time. A lot of fear and apprehension at walking away from a very high-paying job, but that would be a topic for another post. I’m now starting to get serious about modelling taxes etc.
In particular, I have questions about withdrawing pillar 2, and I’m thinking there may be people in this group that could advise on options. I’ll probably hire a tax advisor to go through this, but I’d like to be as informed as possible to start with:
- I’m currently living in French-speaking Switzerland and plan on moving to Spain to be closer to my family.
- Withdrawal of a pension lump sum in Spain is taxed as income, so withdrawing a lump sum while being resident in Spain is a no-no.
- Thus, I’m looking to understand what tax-optimised workarounds I could find for doing this. One option that comes to mind would be to move to neighbouring France in the coming months, retrieve the money, and only then move to Spain, at which point the money would be considered as wealth and not income. Or this might actually not be necessary if I weren’t considered as resident in Spain for 2021 if I move late in the year, although I still need to investigate this in more detail. The devil is in the details and any mistake could cost me very dearly as almost half of my wealth is in pillar 2.
As I think through the options I have some questions and I’d appreciate answers from anyone that has either done it or has practical knowledge of the procedure:
* What kind of documentation would the pension fund require to allow retrieval of the money? Would it be enough to provide proof of leaving the country, or would it require proof of domicile in the new one? And what kind of proof?
* Has anyone gone through the full process and how long did it take?
* Once the pension fund accepts releasing the money, does it need to send it to a bank account in the new country or residence, or could it be a bank account in Switzerland? I think this is important as any large sum entering a Spanish bank account would immediately raise scrutiny from Spanish tax authorities and I’d rather not have to deal with that.
* What is the most favourable canton tax-wise for opening the vested benefits account upon leaving my job?
* Any other solutions to minimise tax on this operation? Note that moving to a country other than Spain for a period of time would not be practical for me as I have children that need to go to school, unless it’s neighbouring France.
* Any first-hand recommendations for a reliable tax advisor on this topic? (French or English speaking)