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Gift and inheritance tax consequences in Switzerland
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Gift and inheritance tax consequences in Switzerland

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If you are living in Switzerland, there may be tax consequences on top of ordinary income and wealth tax, if you receive gifts or inheritance.

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Swiss inheritance law

The Swiss Civil Code regulates the Swiss inheritance law, and the law defines how the estate of the deceased must be split between the heirs. If no inheritance contract/will have been created in line with the Swiss law, the law defines the split between the heirs. However, there will always be a mini-mum part due to e.g., spouse and children

If international assets are involved, it is recommended to conclude an inheritance contract under the foreign law, to ensure that a desired allocation of the non-mandatory part of the inheritance is reached.

There are less regulations around gifts, albeit it should be noted that gifts made within few years be-fore a person’s decease may impact the inheritance tax as well.

 

Tax consequences of an inheritance or gift

There is no federal tax of on inheritance or gifts, but almost all cantons levy an inheritance and a gift tax, which is due on the worldwide income and assets. The taxes level varies on cantonal differences as well as the amount inherited or received as a gift.

Whereas all cantons regard inheritance and gift between spouses and registered partners as non-taxable, four cantons (AI, NE, LU (community level only) and VD) levy tax on inheritance to direct chil-dren and three levies tax on gifts to direct children (AI, NE, and VD). The more distant the relationship, the more cantons levy inheritance and gift tax, and typically at increasing rates. Currently only two cantons, OW and SZ neither levy inheritance tax nor gift tax.

In Switzerland, the heir or recipient of the gift pays the tax burden, however, in solidarity with the donor.

Tax due for children is in all cases 0%, but the tax due for parents differs, as can be seen in the table below: 

Inheritance tax (2021)

Canton

Tax due for parents


Zurich

Tax rate: 2% - 6% Tax-free amount: CHF 200'000

Basel-Stadt

Tax rate: 5% - 11% Tax-free amount: CHF 2’000

Geneva

Tax rate: 0% Not applicable in case on lump-sum taxation

Bern

Tax rate: 6% - 15%; Tax-free amount: CHF 12'000

Zug

Tax rate: 0%

Schwyz

Tax rate: 0%

Gift taxation (2021)

Canton

Tax due for parents


Zurich

Tax rate: 2% - 6% Tax-free amount: CHF 200'000

Basel-Stadt

Tax rate: 5% - 11% Free Limit: CHF 10’000

Geneva

Tax rate: 9% - 12% (“centimes additionels” may apply) Free Limit: CHF 5’000

Bern

Tax rate: 6% - 15%; Tax-free amount: CHF 12'000

Zug

Tax rate: 0%

Schwyz

Tax rate: 0%

Tax planning

Due to the significant differences in inheritance and gift tax between the Swiss cantons, it is advisable to seek professional advice to understand the applicable tax consequences for the canton in ques-tion. Secondly, it is important to understand the tax consequence on assets based outside Switzer-land, e.g., real estate, as they may fall under foreign law.

 

Do you have any inheritance and gift tax related questions?

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