Inheritance and Gift Taxes - 12 Things You Need to Know
Almost all industrialized nations have an inheritance tax. This includes Switzerland. With the exception of Schwyz, all cantons levy such a tax. It is generally levied as an inheritance tax for every heir and legatee. In addition, almost all cantons levy a gift tax. That way, even transfers of assets before death are taxed.
- Gifts and inheritances are taxed in Switzerland. Gift recipients pay a gift tax; heirs pay an inheritance tax. The cantons Solothurn and Graubünden also levy an estate tax.
- The inheritance tax and gift tax is levied by the cantons (and in some cantons, also by the municipalities). The federal government does not levy any inheritance taxes or gift taxes.
- When assessing liability for inheritance tax, the last domicile of the testator generally applies. If real estate is owned, the canton in which the property is located is entitled to levy tax on it.
- Heirs are subject to tax on their share of the inheritance, and legatees are subject to tax on their legacy. The kinship with the testator, and the tax progression based on the amount are individually checked for each person.
- Some cantons have linear tax rates and others have progressive tax rates. For detailed information, please refer to the «Overview of Cantonal Inheritance Tax and Gift Tax».
- Most cantons have a tax allowance. This means that tax is only levied on the amount (gift or inheritance) that exceeds the allowance.
- Most cantons have allowances. No tax is due under certain circumstances and up to certain maximum amounts. If the amount is higher, the entire amount must be taxed.
- Inheritance tax is generally charged to the heir. All heirs are jointly and severally liable for the taxes.
- The gift tax takes into account the inheritance tax. If a previously-gifted person inherits, the tax allowance may already have been used up. Progressive tax rates take gifts into account.
- For going concerns, the cantons Appenzell Ausserrhoden, Bern, Basel-Landschaft, Freiburg, Glarus, Graubünden, Nidwalden, St. Gallen, Thurgau, Waadt, and Zurich offer tax breaks.
- According to the Swiss Federal Law on the Simplification of Additional Taxation for Inheritances, heirs can benefit from simplified additional taxation if the testator has evaded tax.
- Heirs who are not related to the deceased person pay significantly higher inheritance taxes. It is worth noting the different rates for partners. From a tax perspective, marriage is an advantage. Stepchildren and foster children are also not considered to be the same as biological children in many cantons.