The Global Property Guide looks at inheritance from two angles: taxation, and what inheritance laws apply to foreigners leaving property in Switzerland: what restrictions there are and whether making a will is advisable.

INHERITANCE TAX

How high are inheritance taxes in Switzerland?

No such tax exists at the federal level. The inheritance tax is a cantonal tax, based on the net assets transferred to the statutory or designated heirs or other beneficiaries. Increasingly, the cantons are in the process of eliminating the inheritance tax altogether, at least for descendants.

Inheritance taxes are imposed by the cantons and communes in the following situations:

• Estates of deceased persons having had their last domicile in Switzerland; and
• Estates of foreign deceased persons involving the transfer of Swiss real property or unincorporated business enterprises in Switzerland.

Rates depend upon the existing relationship (i.e. the relationship between the deceased and the heirs, or between the donor and the donee) and the size of the inheritance or gift. Interspousal gifts and inheritances collected by the surviving spouse are frequently exempt or taxed at very low rates (up to 6%). Gifts to and inheritances received from unrelated persons attract rates ranging from 20% to 40%.

The taxable base is usually the market value of the property with special provisions for securities and real property. After determining the applicable rate based on the degree of relationship (ranging from 0% to 40%), the canton will then levy a surcharge (from 100% to 300% of the basic rate) based on the value of the property.

Canton of Bern
The inheritance of the spouse and descendants are not taxed in Bern. Inheritance or properties received by other individuals are taxed at progressive rates. An allowance of CHF10,000 (€8,333) can be deducted from the taxable inheritance. For assets utilized in business, only 50% of the net value is taxed.

The tax amount calculated above is still subject to a multiplier based on the degree of relationship:

Canton of Geneva
For the Canton of Geneva, the following exemptions for inheritance tax are granted:

• CHF5,000 (€4,167) for descendants, ascendants and spouses; and
• CHF500 (€417) for others.

The rates depend on the degree of relationship between the deceased and the beneficiaries and the amount the beneficiaries receive.

The calculated tax will be subject to a multiplier, which is not equal to the coefficient set for income and wealth tax. The multiplier is set yearly. Descendants and ascendants in line as well as spouses are not subject to the multiplier.

Canton of Zurich
Inheritances left to spouses and descendants are exempt in the Canton of Zurich. The following allowances are also granted:

• CHF200,000 (€166,667) for parents;
• CHF15,000 (€12,500) for fiancés, siblings, grandparents, stepchildren, godchildren, foster children and home helps employed for at least 10 years;
• CHF50,000 (€41,667) for the partner of the deceased or the donor if the couple had lived together for at least 5 years in the same household and none of the previously mentioned deductions apply;
• CHF30,000 (€25,000) for dependent persons who have a permanent or partial occupational disability.

If the taxable inheritance exceeds CHF1,500,000 (€1,250,000), a flat rate of 6% applies to the whole amount. A multiplier, which varies according to the relationship of the deceased and the beneficiary, is then applied to the calculated tax.