Switzerland Fact-File Part 4:
Individual Business Tax-Efficient Structures

4.6 Switzerland Personal Estate and Inheritance Planning

Gift and Inheritance Taxes

Gift and Inheritance Taxes are levied only at cantonal level; there is no federal inheritance or gift tax in Switzerland. Rates (which tend to be progressive) vary according to canton, and within the cantons, according to the relationship between donor and beneficiary.

Tax on the transfer of assets to non-relatives can be as high as 60% in some cantons. Transfers between spouses are generally not liable to the tax and in half of the 26 cantons transfers between parents and their children are also free of tax.

The recipient of any property is the person liable to pay the tax, although in some cases donors may also incur tax liability. One canton (Schwyz) does not levy inheritance tax and two cantons (Lucerne and Schwyz) do not levy gift tax.

The taxable base is worked out on the net value of the assets transferred. Real estate is taxed at its fiscal value – this is considerably lower than normal market values. Other assets are valued at market value.

The following is a comparison of the inheritance and gift tax situation in the cantons of Bern (also referred to as Berne), Geneva and Zurich:

• Bern. A tax rate of 1% applies to inheritances valued at under CHF100,000. The rate rises to a maximum of 2.5% for inheritances valued over CHF600,000. For an inheritance valued at between CHF300,000 and CHF400,000, tax is levied at 1.75%. Inheritances relating to a spouse or direct descendants are not taxed in Bern. An allowance can be deducted from taxable inheritances (CHF10,000). A complex tax multiplier system is applied to the taxable base, once this has been established, and this depends on the relationship of a beneficiary to the donor.
• Geneva. Taxation of inheritances takes place on a sliding scale depending on the closeness of the relationship between the beneficiary and the deceased. A spouse will pay tax at between 0% and 6%, whereas the more distant the relationship, the higher the upper tax rate becomes (up to 26%). Close relatives (including a spouse) are allowed CHF5,000 exemption and more distant relatives or non-relatives CHF500 exemption. Again, a tax multiplier (set each year) is applied to arrive at the Inheritance Tax liability.
• Zurich. The progressive rate of inheritance tax in Zurich is similar to that in place in Bern. For an inheritance of less than CHF30,000, the tax rate is 2%. The maximum rate is 7% for inheritances valued at between CHF840,000 and CHF1.5m and for average inheritance values of between CHF180,000 and CHF360,000, the rate is 5%. A flat rate of 6% applies to the entire value of an estate that exceeds CHF1.5m. Sums left to a spouse and direct descendants are exempt. An exemption allowance is granted to other relatives – CHF200,000 for parents and CHF15,000 for siblings, grandparents and stepchildren. A multiplier is applied to the taxable base, the integer varying depending on the closeness of the relationship between beneficiary and deceased.

Introductory Guides

Switzerland Artist Tax Guide

Switzerland Contractor Tax Guide

Switzerland Entrepreneur Tax Guide

Switzerland Professional Tax Guide

Switzerland Small Business Tax Guide

Switzerland Sportsperson / Entertainer Tax Guide

Fact-File

Part 1: Switzerland Business Formation for Individuals

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