Swiss Gift & Inheritance tax

There is no federal inheritance or gift tax in Switzerland. Instead, inheritance and gift taxation is governed exclusively at cantonal level, with 26 different cantonal tax regimes applying their own rules, exemptions and tax rates.

This decentralised framework makes inheritance and gift tax planning particularly complex, especially for private clients with cross cantonal or international situations, business assets, trusts or real estate holdings. Understanding how Swiss rules apply to your personal circumstances is essential to anticipate tax exposure, avoid double taxation and plan efficiently.

Swiss inheritance and gift tax principles

Swiss gift and inheritance tax framework

Inheritance and gift taxes in Switzerland are governed by both civil law and cantonal tax legislation. Swiss civil law regulates the organisation of inheritance and the distribution of assets, particularly where no will or succession agreement exists. Cantonal tax laws, however, determine how inheritance and gifts are taxed.

Key principles include:

• The absence of any federal inheritance or gift tax
• 26 cantons applying distinct tax regimes
• Taxation generally determined by the residence of the donor or deceased
• Specific allocation rules for business assets and real estate

Who is subject to Swiss gift and inheritance tax

Inheritance and gift taxes are generally due if:

• The donor is a Swiss tax resident
• the deceased was a Swiss tax resident at the time of death

According to Swiss case law, an individual is considered resident in Switzerland when they effectively reside there or intend to reside there on a long term basis.

Tax is normally payable to the canton of residence of the donor or deceased, subject to important exceptions:

• Business assets are taxed in the canton where the business of a partnership or sole proprietorship is located
• Real estate is taxed in the canton where the property is situated
  Foreign real estate is generally not subject to Swiss inheritance tax

Correctly determining residence and allocating assets is essential, particularly in cross border situations.

Tax base, exemptions and cantonal specificities

Tax base and beneficiaries

Swiss inheritance and gift tax is generally levied on the amount received by each heir or donee. The applicable tax depends on:

• The value of the assets transferred
• The degree of kinship between the donor or deceased and the beneficiary

Exemptions and relationship based tax rates

Across all cantons, transfers between spouses are fully exempt from inheritance and gift tax.
Gifts or inheritances received by biological or adopted children are generally exempt, with notable exceptions in certain cantons:

• Appenzell Innerrhoden: exemption of CHF 300,000 per child, excess taxed at a flat rate of 1 percent
• Vaud: inheritance exemption up to CHF 1,000,000 and gift exemption up to CHF 300,000 per year, with progressive rates thereafter
• Neuchâtel: flat tax rate of 3 percent

Parents, siblings, more distant relatives and unrelated beneficiaries may be taxed at rates ranging from 2 percent up to 50 percent depending on the canton and the relationship with the deceased.

Public utility foundations may benefit from full exemption, subject to cantonal requirements.

Tax free allowances and cantonal exceptions

Important cantonal differences remain:

• All cantons levy inheritance tax except Schwyz and Obwald
• All cantons levy gift tax except Schwyz, Obwald and Luzern

Some cantonal specificities include:

• Luzern does not levy gift tax but treats gifts made within five years preceding death as inheritance
• Graubünden taxes inherited assets as an entity without regard to heirs
• Vaud may levy inheritance tax on certain non Swiss residents who have never worked in Switzerland, subject to treaty relief

Tax rate methodologies across cantons

Swiss cantons apply several methods to determine inheritance and gift tax rates, including:

• Progressive rates based on both the value of the inheritance and the degree of kinship
• Flat rates adjusted according to the amount received
• Progressive scales multiplied by coefficients linked to kinship
• Flat rates based solely on the degree of relationship

As a result, similar situations can lead to very different tax outcomes depending on the canton involved.

Assessment, valuation and specific asset classes

Valuation of business assets

Business assets are generally valued at their market value at the date of death or transfer. In several cantons, this value may be reduced, often by up to 50 percent, provided certain conditions are met.

These conditions typically include the heir or donee playing an active role in the business or having held an interest in the business prior to the transfer.

Taxation of real estate

Real estate is usually assessed at its tax value rather than its fair market value. Depending on cantonal rules, this tax value typically represents between 60 and 80 percent of the market value.

Specific valuation rules may apply to agricultural properties based on the income generated.

Trusts and inheritance tax in Switzerland

Switzerland does not recognise trusts as legal entities, but it does recognise their effects.

Trusts are generally categorised as revocable or irrevocable. In the case of revocable trusts, the settlor is typically treated as the owner of the trust assets. Gift or inheritance tax generally arises at the death of the settlor, with applicable tax rates negotiated with the tax authorities.

Irrevocable discretionary trusts and irrevocable fixed interest trusts may not trigger Swiss gift or inheritance tax, depending on the structure and circumstances.

Philanthropy and foundations in Switzerland

Foundations as philanthropic and estate planning tools

Switzerland hosts over 13,000 foundations, with total capital approaching CHF 100 billion, making it one of the most significant foundation jurisdictions worldwide.

A foundation is legally defined as a pool of assets dedicated to a specific purpose and managed by a foundation board. Foundations have no owners or members and are subject to supervision by public authorities.

Key points:

• Foundations are generally tax exempt if they pursue charitable purposes;
• Founders and donors may usually deduct up to 20% of taxable income;
• A foundation implies an irreversible transfer of assets — it is not a tax saving instrument per se;
• Family foundations exist and may resemble trust like arrangements under strict conditions.

The creation, funding and governance of a foundation have decisive tax consequences, both at Swiss and international level.

RSM Switzerland assists clients with:

• Feasibility analysis and structuring;
• Asset allocation and funding strategies;
• Negotiations with tax and supervisory authorities;
• Integration into overall succession and estate planning.

Individual taxation: succession & donation

There is no inheritance or donation tax at federal level in Switzerland. These taxes are levied exclusively by the cantons, which determine:

• Applicable tax scales and rates;
• Exemptions and allowances;
• Calculation methods.

Spouses and registered partners — as well as direct descendants — are generally exempt, with exceptions in certain cantons (Vaud, Neuchâtel, Appenzell Innerrhoden).

Inheritance tax is due by heirs in the canton of the deceased. Gift tax is generally due by the recipient in the canton of the donor.

Estate planning may involve reviewing:

• Alternative asset holding structures;
• Donation timing strategies;
• Cross border coordination.

International estates and cross border situations

Double taxation treaties and allocation rules

Switzerland has concluded inheritance tax treaties with a limited number of jurisdictions, including Germany, the United Kingdom and the United States.

Under these treaties, real estate is taxed in the country where it is located, and business assets are taxed where the business operates. The exemption method is generally applied in Switzerland to avoid double taxation.

Situations without a treaty and death abroad

Where no treaty applies and death occurs in Switzerland, worldwide movable assets may be taxable in Switzerland, excluding foreign real estate. Double taxation may arise due to dual tax residence or differences in debt allocation methods.

In the event of a death abroad, worldwide movable assets are typically taxed abroad. Switzerland levies inheritance tax only if the deceased was a Swiss resident. Swiss real estate and business assets remain taxable in the canton where they are located, potentially at maximum rates unless an effective rate is requested.

Compliance obligations

Filing and payment

Gift and inheritance tax returns must generally be filed within 30 days to 6 months following the transfer, depending on the canton and the nature of the transaction. Payment is typically due within 30 days following the issuance of the tax assessment, subject to cantonal variations.

Who is liable

Upon death, heirs are liable for inheritance tax. For gifts, the recipient is generally liable for the gift tax. In certain cantons, the donor may be held jointly liable if the recipient does not pay the tax.

Our support

How RSM Switzerland supports private clients

RSM Switzerland supports private clients, families and entrepreneurs with all aspects of inheritance and gift tax planning, covering estate and succession planning, review and drafting of wills, lifetime structuring and asset holding strategies, as well as cross border coordination with foreign advisors.

As part of the RSM Private Client Services network, we deliver coordinated multi jurisdictional solutions aligned with our clients’ personal and family objectives.

Plan ahead with confidence

Speak with our Tax and Private Client specialists or download our inheritance and gift tax planning factsheet.