Despite the many criticisms they face, trusts and partnerships are good tax and estate planning tools. However, the use of these tools, which are not integrated as such in Swiss law, requires in-depth knowledge if one wishes to master the various aspects and taxation modalities.

Since Switzerland has no specific legislation on trusts, only the effects of the trust are recognized, not the trust itself. The interpretation of the tax authorities does not stop at the name of the trust, but at its real effects, according to its statutes and regulations. As a result, some people often relocate to Switzerland thinking that the tax treatment of their trust will follow its name (e.g. "irrevocable discretionary trust"). In reality and because of a small clause that would leave powers to the trustee (such as the one to modify the beneficiaries), the Swiss tax authorities may qualify this trust in a completely different way (transparent, for example) and thus completely ruining the strategy put in place with serious tax consequences. It is therefore absolutely essential to ensure the legal and tax compatibility of instruments such as trusts and partnerships from a Swiss and foreign perspective.

Our team is at your disposal to explain the different possibilities available to you as well as their tax specificities, to review what has been put in place and to make the necessary adjustments taking into account the legislation of the countries involved.

Our Tax & Legal Specialists