Inheritance Tax Initiative I RSM Switzerland

In our article from autumn 2024, we already presented the key points of the inheritance tax initiative. Since then, there have been significant new developments. The Federal Council has officially recommended rejecting the federal popular initiative ‘For a social climate policy – financed fairly through taxation (Initiative for the Future)’ and published its message on this on 13 December 2024. The initiative will be put to a referendum on 30 November 2025.

Federal Council recommends rejection

The Federal Council rejects the initiative, particularly for economic, fiscal, institutional and climate policy reasons.

Implementing the initiative would significantly reduce Switzerland's attractiveness as a place of residence for wealthy individuals. According to an expert opinion commissioned by the federal government, 77% to 93% of the potential tax base, comprising income taxes of municipalities, cantons, and the federal government, as well as wealth taxes of municipalities and cantons, could be lost as those affected would move their place of residence abroad. Estimates by the SFTA based on the expert opinion and additional data collected from the cantons even indicate a range of 85% to 98%.

After the effects of emigration, only an estimated CHF 100 to 650 million in additional revenue could be expected (instead of around CHF 4 billion). With simultaneous tax losses in income and wealth taxes, the bottom line could even result in a reduction in revenue for municipalities, cantons, and the federal government.

The introduction of an inheritance and gift tax at the federal level would also affect the tax base of the cantons. Their scope for levying inheritance and gift taxes on assets exceeding CHF 50 million would be greatly reduced, resulting in a loss of revenue.

The federal government is also already pursuing an active climate policy to achieve the goal of climate neutrality by 2050. The federal government has sufficient financial resources of around CHF 2 billion per year at its disposal for this purpose.

Referendum on 30 November 2025

The vote will take place on 30 November 2025. Polls conducted in June and July 2025 show that a clear majority (73%) is against the initiative.

The survey results are particularly interesting when considering the age of the respondents. According to the Watson/DemoSCOPE survey, 53% of 15- to 34-year-olds would vote yes, while older age groups overwhelmingly reject the proposal.

The political leanings of survey participants also paint a clear picture (source: Watson/DemoSCOPE, August 2024):

Majorities Yes: SP and GPS
Majorities No: GLP, Die Mitte, FDP and SVP

If the referendum is accepted, the implementing provisions must be issued in the form of an ordinance within three years, i.e. by 30 November 2028 at the latest. According to the initiators, these provisions should apply retroactively from the date of acceptance.

The Federal Council emphasizes that the retroactive effect of the initiative applies only to estates and gifts that are distributed after its adoption. Measures to prevent tax avoidance will come into force only with the later implementing provisions, as retroactive application is not constitutionally permissible.

Therefore, even if the initiative should be accepted, there will still be enough time until the ordinance provisions come into force to adapt to each situation and take appropriate measures to mitigate or avoid the unacceptable effects of this initiative.

Conclusion

In addition to the reasons for rejection cited by the Federal Council, the initiative could – as outlined in our article from autumn 2024 – be confiscatory in nature and not provide for any exceptions for corporate or business assets. Its adoption could have far-reaching negative consequences for business succession, large estates and Switzerland's attractiveness.

Regardless of the outcome of the vote, potentially affected individuals and families should closely monitor developments and review their succession and asset planning in good time. We would be happy to assist you in this regard.