• Sectors we work in banner(2)

    Quick Reads

Available in other languages:

Swiss estates: would a 50% tax on the super-rich be appropriate?

Inheritance and tax gift situation in Switzerland

While there is no federal inheritance and gift tax, it is levied by all cantons - with the exception of Schwyz and Obwalden - in accordance with their cantonal legislation.

In most cantons, inheritance and gift tax rates vary according to the degree of kinship with the deceased or donor and the amount of the gift or inheritance (progressive tax rates).

Commonly, surviving spouses, children and certain associations and foundations are exempt from tax on gifts or transfers of inheritance. 

What is the inheritance tax initiative?

Earlier this year, a proposal arose in Switzerland to levy a federal inheritance and gift tax of 50% on inheritances and gifts exceeding CHF 50 million.

The inheritance tax initiative was launched by the young socialists party with the aim to finance the ecological transformation of the Swiss economy.

Although many aspects of the initiative still need to be clarified - not least the way in which the CHF 50 million deductible is calculated and applied according to the new legislation – here are some of the key points:

  • the federal inheritance and gift tax is to be levied in addition to the cantonal and municipal inheritance and gift taxes already levied;
  • it will affect all types of assets, whether bankable assets, cryptocurrencies or shares in a local or multinational company;
  • it will be levied for all beneficiaries, including surviving spouses, children, associations, foundations and third parties; and
  • the text of the initiative does not allow for any exceptions and prescribes additional measures to prevent tax avoidance in the event of people moving abroad (a national register should be created and managed specifically for this purpose).

The initiative would plausibly affect 2,000 people in Switzerland.

What are the criticisms of this inheritance tax initiative? 

The Swiss government considers that the proposals put forward by the authors of the initiative are not relevant to achieving Switzerland's climate objectives. It also believes that the retroactive taxation of inheritances and gifts called for by the authors of the initiative is extremely problematic from a political point of view.

The initiative is a source of uncertainty, not least because of its unclear transitional provisions.

At the same time, the new federal inheritance and gift tax would undermine Switzerland's attractiveness as a location for business and the tax revenues currently generated by the Confederation, cantons and municipalities. 

A similar initiative had already seen the light in 2015 aiming to introduce a federal inheritance and gift tax of 20% on inheritances and gifts in excess of CHF two million, and to allocate part of the proceeds to the pension system. The latter was rejected by 71% of voters.

Where do we stand with the political process?

The Swiss government has already rejected the initiative and refused to draw up a counter proposal to the inheritance tax initiative in May 2024. The Federal Council will set out its views on the initiative and the many outstanding issues in detail in its report to Parliament this winter. On this basis, Parliament will debate the initiative and decide on a recommendation for a vote. The referendum will probably take place in 2026.

See link below for the report to the government (only available in French, German and Italian).

Le Conseil fédéral rejette l’initiative populaire « Pour une politique climatique sociale financée de manière juste fiscalement »

Our thinking

  • Simon Weil writes for Trusts & Trustees on cross-border philanthropy

    Simon Weil

    In the Press

  • Relocating to Switzerland: Swiss tax residency

    Grégoire Uldry

    Insights

  • Advancing Digital Property Rights: Thoughts for your Digital Estate

    George Bull

    Quick Reads

  • Martyn’s Law / the Protect Duty: new Bill published

    Rory Partridge

    Insights

  • The Financial Times quotes Sophie Dworetzsky on the potential watering down of Labour’s non-dom tax plans

    Sophie Dworetzsky

    In the Press

  • Bloomberg quotes Dominic Lawrance on the impact of phasing out the non-domicile tax status in the UK

    Dominic Lawrance

    In the Press

  • “This is going to hurt” – potential implications of the forthcoming Budget on financial arrangements on divorce

    Charlotte Posnansky

    Quick Reads

  • Buying and Selling Swiss Property – Tips for Non-Swiss Nationals and Non-Swiss Residents

    Sophie Hart

    Insights

  • How the forewarned ‘hike’ on private school fees is going to bite – a family law and Private Office perspective

    Jemimah Fleet

    Quick Reads

  • Asian Private Banker quotes Dominic Lawrance and Julia Cox on anticipated tax changes in the UK

    Dominic Lawrance

    In the Press

  • Mark Howard writes for the Financial Times’ Your Questions column on the pros and cons of becoming a non-executive director

    Mark Howard

    In the Press

  • Removing A Trustee From a Trust

    Lydia Kember

    Insights

  • Benoît Pasquier and Alex Needham write for City AM on ensuring a more equitable future at the Olympic Games

    Benoît Pasquier

    In the Press

  • Regime change: The beginning of the end of the remittance basis

    Dominic Lawrance

    Insights

  • Prosperity Prep: Equipping the Next Generation for Wealth and Business Success

    Patrick Chan

    Events

  • Hubbis quotes Jeffrey Lee on succession planning

    Jeffrey Lee

    In the Press

  • Thomas Moran and Ruth Morris write for Prime Resi on the future of London's prime property market

    Thomas Moran

    In the Press

  • Budgeting for change: what should Landed Estates be doing before the Budget?

    Sarah Wray

    Quick Reads

  • The Telegraph quotes Dominic Lawrance on anticipated tax changes and the impact on non-doms

    Dominic Lawrance

    In the Press

Back to top