corporate
Inheritance tax in Switzerland: key questions you need to ask yourself
Inheritance tax is a subject that is remarkably complex and difficult to deal with. Failing to think ahead could have severe repercussions, both personal and financial.
To help you understand where inheritance tax will be payable on the death of a person resident in Switzerland, Laetitia Staehli, Senior Wealth Planner at Lombard Odier in Switzerland, explains the basic principles.
What inheritance tax is payable on the death of a person resident in Switzerland?
As a general rule, if you are a Swiss resident at the time of your death, inheritance tax will be charged in Switzerland.
Inheritance taxes are levied only at the cantonal level, although the cantons of Schwyz and Obwalden do not levy any inheritance tax.
So, inheritance tax is owed solely in the canton where you were resident at the time of death.
Are there any exceptions to Swiss inheritance tax rules?
There are some exceptions to the general principle above. Specifically, real estate situated outside the canton where the deceased was resident at the time of death is taxed where it is located.
In other words, if you are resident in the canton of Geneva and own a property in the canton of Vaud, that property will be taxed in the canton of Vaud. For real estate located abroad, jurisdiction lies with the foreign country.
If you have furniture, collections or artworks such as valuable paintings in a second home in Geneva or held in the free port in Geneva, you need to be aware that the canton of Geneva charges inheritance tax on these assets even if you are resident in another canton.
Read also : Estate planning: why make a will? | Lombard Odier
Are there inheritance tax exemptions for family members?
Exemptions from inheritance tax are in place for spouses – except for flat-rate taxpayers in the canton of Geneva – and for institutions recognised as being of public utility.
Descendants are generally also exempt. However, this is not the case in some cantons, notably Vaud and Neuchâtel, and in Geneva if the deceased was a flat-rate taxpayer at the time of death or before death (their final three tax returns are taken into consideration).
Lastly, it should be noted that the canton where your heirs reside is not taken into consideration when applying inheritance tax rules.
In what cases might inheritance tax be payable abroad?
If you are a Swiss resident at the time of your death, inheritance tax may be levied abroad in three cases:
- If you hold foreign assets abroad
- If you hold foreign assets in Switzerland, for example French, UK or American securities
- If your heirs live abroad, for instance in France
Nationality generally does not affect these rules, except with US citizens.
Lombard Odier is your preferred partner to help you preserve your assets for the long term. Our Wealth Planning teams in Switzerland and abroad are available to help you consider these issues, and can work alongside your usual advisors to put the best legal and tax solutions in place.
Need to consider how Swiss inheritance tax rules apply when a non-Swiss resident dies? Find out more from our article and video on the subject.
Important information
This document is issued by Bank Lombard Odier & Co Ltd or an entity of the Group (hereinafter “Lombard Odier”). It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a document. This document was not prepared by the Financial Research Department of Lombard Odier.
Read more.
share.