In 2018, federal, cantonal and municipal authorities in Switzerland earned CHF 148 billion. This figure shows how important various taxes are in Switzerland’s federalist system. Inheritance tax in particular varies greatly from canton to canton. This means that the tax burden varies depending on where you live.
Each of the 26 cantons has its own rules for taxing income, assets and inheritances. This makes the need for tax advice even greater.
Article 3 of the Federal Constitution allows cantons to choose their own taxes. But only within the limits set by the Federal Constitution. Municipalities can only levy taxes if the canton allows it.
The STAF reform, which was launched in 2020, was an important step in tax policy. It is intended to make the taxation of companies more uniform and ensure Switzerland’s competitiveness. As a result of the reform, the cantons will receive more of the direct federal tax revenue: 21.2% instead of the previous 17%. This gives the cantons more scope to make their own decisions.
Important findings
- In 2018, the Swiss Confederation, cantons and municipalities generated total income of CHF 148 billion.
- Inheritance tax regulations vary greatly between Switzerland’s 26 cantons.
- Article 3 of the Federal Constitution regulates the federalist order and distribution of competences.
- The STAF reform of 2020 aims to achieve uniform corporate taxes and increase the cantonal shares of direct federal tax.
- Tax advice is essential due to the complex cantonal differences.
What is inheritance tax in Switzerland?
In Switzerland, inheritance tax is a tax on inheritance. It varies from canton to canton and depends on several factors. This includes the degree of kinship and the value of the assets. The inheritance tax calculation follows the rules of the respective canton.
Spouses and registered partners pay less tax than other heirs. The tax rates for them are between 2 and 18 percent. Children and grandchildren pay taxes of between 6 and 15 percent.
The value of the estate also influences how much tax has to be paid. Spouses and children often have higher tax-free allowances. These allowances are between CHF 0 and CHF 50,000.
Inheritance tax is calculated according to the value of the estate and the degree of kinship. For real estate, the market value counts; for securities, it depends on whether they are listed on the stock exchange. Debts can be deducted from assets, which reduces the tax.
There are 26 cantons in Switzerland that determine their own taxes. The federal government may not levy inheritance tax. This is why there are major differences between the cantons. For example, children are exempt from tax in most cantons. But not everywhere.
Some cantons, such as Schwyz and Obwalden, do not levy inheritance tax at all. The tax rates are different in every canton. They can vary from 5 percent in Nidwalden to over 20 percent in other cantons.
The tax rules can vary greatly depending on the canton and the relationship. It is important to be well informed and to plan ahead.
Overview of tax liability in Switzerland
There are many rules on taxation in Switzerland. This includes inheritance tax and tax on gifts. The allowances for inheritance tax and certain exemptions are important.
Special features of donations
Gifts must be taxed in Switzerland. The rules vary from canton to canton. There are simple and complicated gifts, such as caring for children. In Basel, foster children are exempt from tax. Other cantons have their own rules.
Material tax liability
Tax liability through inheritance occurs when someone dies. These taxes are levied differently in each canton. There is no uniform rule for the whole country.
The allowances and tax rates are different in each canton. This leads to different tax burdens. Fortunately, spouses and registered partners are often tax-exempt. This reduces the tax burden.
Inheritance tax in Switzerland: calculation and rates
Inheritance tax in Switzerland depends on many factors. These include the value of the inheritance, the degree of kinship and cantonal rules. Online inheritance tax calculators are very helpful. They make it easier to calculate the tax accurately. There are different tax rates in each canton. It is therefore important to know the local laws in detail.
Inheritance tax calculator
Inheritance tax calculators are useful for an accurate tax calculation. They take into account the estate value, allowances and the cantonal tax rates. With these tools, heirs can quickly see their tax debts and allowances. This allows them to plan better.
Inheritance tax allowance
Tax allowances reduce the tax burden. They vary depending on the relationship and cantonal law. Spouses and registered partners often receive high tax-free allowances. Other heirs pay more. It is important to know all the allowances in order to calculate the tax correctly.
| Canton | Tax-free allowance (spouse) | Allowance (children) | Exempt amount (other) |
|---|---|---|---|
| Zurich | tax-free | tax-free | 100,000 CHF |
| Berne | tax-free | respectively CHF 300,000 | 10,000 CHF |
| Geneva | tax-free | 100,000 CHF | 50,000 CHF |
Inheritance tax must be calculated on time. For example, in Zurich within 14 days of the death. All documents must then be submitted within 60 days. This avoids uncertainties and unexpected costs.
Due to the complex rules and various tariffs, good planning and advice is important. This allows you to take advantage of tax benefits and avoid unpleasant surprises.
Variations of inheritance tax in the cantons
There are many differences in inheritance tax in Switzerland. Each canton has its own rules. This shows how diverse our tax system is.
In many cantons, children and spouses do not pay inheritance tax. This also applies to money and gifts. For movable assets, the donor’s place of residence is decisive.
Example cantons
A few examples show the differences:
| Canton | Inheritance tax amount | Allowances and special features |
|---|---|---|
| St. Gallen | CHF 147,000 | Exempt amount up to CHF 5,000 |
| Schwyz | CHF 0 | No inheritance tax |
| Berne | CHF 42,000 | Foster children are tax-exempt |
In St. Gallen, gift taxes could amount to CHF 147,000. In Schwyz you pay nothing for this. Depending on the canton, unmarried partners can also save tax.
A lawyer can help you understand the rules. He finds ways to minimize taxes. You need a good knowledge of cantonal tax rules.
Inherited assets can result in taxes. That depends on the value. The place of taxation is important for real estate. It is located where the house stands.
Legal aspects of inheritance tax in Switzerland
In Switzerland, inheritance tax legislation is determined by the cantons. As the country has a federalist system, each canton can make its own rules. Taxes differ from canton to canton.
There are two types of inheritance tax: inheritance tax and inheritance tax. Inheritance tax is levied on the inheritance itself. The inheritance tax takes into account who inherits. How high the tax is depends on the degree of relationship and the canton. Spouses and children often do not have to pay inheritance tax.
If you inherit, you can take advantage of tax advice in many cantons. This advice helps to save taxes. Each canton has its own exemption amounts, which depend on the relationship to the testator.
Many factors influence inheritance tax in Switzerland. These include:
- Cantonal tax laws
- Federal court decisions
- International agreements
These influences can significantly change the tax laws. That’s why it’s important to stay up to date and get good advice.
- The tax rates are often progressive.
- Market value is what counts for real estate.
- Securities and shares are taxed differently.
- Debts can be deducted from tax.
Inheritance tax in Switzerland is a matter for the cantons, not the federal government. Each canton has its own rules. This makes the tax landscape diverse.
Because of this diversity, you should always keep an eye on current laws and rulings. Professional tax advice is recommended. It helps to find individual solutions for the inheritance.
Strategies for minimizing inheritance tax
Planning inheritance tax in Switzerland can be complicated. The advice of an inheritance tax lawyer is therefore very valuable. Smart planning can save you a lot of money and reduce the tax burden for your heirs.
Inheritance tax lawyer
An experienced inheritance tax lawyer knows exactly how you can minimize your taxes. It makes use of tax reductions and prevents double taxation. This is possible through agreements between countries.
The cantonal tax reductions and allowances are very helpful. Some cantons have even abolished gift tax altogether. Spouses and registered partners often receive tax benefits. The best way to take advantage of this is to plan early.
In summary, the advice focuses on:
- Use of tax allowances and reductions
- Optimization of estate planning to avoid high taxes
- Consideration of the statutory regulations for the avoidance of double taxation
- Strategic donations and their planning
Strategies for minimizing inheritance tax are important because of the differences in the cantons. With the advice of an expert, you can take advantage of all the opportunities to save money.
The future of inheritance tax in Switzerland
The debate on inheritance tax in Switzerland is complex. The proposals of the Young Socialists Switzerland (JUSO) are worthy of note. They want to tax inheritances and gifts over 50 million francs at 50 percent. Such proposals show that major changes could be imminent.
Inheritance tax reform: Possible effects
The proposed reform could have far-reaching consequences. It affects individuals and the entire economy. Two thirds of the revenue is to go to the federal government and one third to the cantons. Such a tax would also affect the financial burden on the cantons. They are already investing heavily in climate protection and energy.
Adaptation to international standards is important. Minimum taxes were agreed by the OECD and G20. These changes could shape Swiss tax policy. They show the need to escape a race-to-the-bottom mentality in tax policy.
Tax reform and AHV financing
The tax reform and AHV financing (STAF), in force since 2020, provides an outlook. It wants to ensure equal taxation rules for companies and the attractiveness of Switzerland. It also aims to harmonize international tax practices.
Forecasts for future inheritance tax
Forecasts point to possible new taxes in the billions. These could impair the federal system and the financial autonomy of the cantons. Both are important for the Swiss tax system.
It is crucial that Switzerland adapts internationally. This is the only way it can remain competitive and respond to global tax policy challenges.
Conclusion
Inheritance tax in Switzerland is complicated and depends heavily on the canton. There are no inheritance or gift taxes at federal level. This gives the cantons a great deal of freedom to set their own taxes. Schwyz and Obwalden, for example, do not levy inheritance tax at all. There is only one inheritance tax in Lucerne.
In most cases, the heir must pay the tax. If he cannot do this, the donor often has to pay. Special rules apply to people from Germany or the Netherlands, even if they live in Switzerland. They may still have to pay taxes in their home country for a while.
You can save taxes with good planning. Taking advantage of allowances and other benefits helps. It is wise to prepare for future changes. This is the best way to take advantage of the different cantons. A good overview of the laws is very important for this.
It is important to know the rules in the cantons and internationally. This helps with good tax planning for the estate. You always have to stay up to date in order to plan taxes well. This is how you can save taxes with clever solutions.