Inheritance tax: what you should know

Cantonal responsibility

There is no Switzerland-wide inheritance tax; levying it is the responsibility of the cantons. Accordingly, tax liability, tax-free allowances and tax rates differ from canton to canton.

Some cantons waive inheritance tax entirely for certain groups of people. Check the rules of the relevant canton individually.

This federal structure also means that the legal situation can change over time. In a specific case of inheritance, it is therefore worth always referring to the cantonal rules currently in force rather than relying on general statements.

Unlike income tax and wealth tax, the decisive factor for inheritance tax is usually not the place of residence of the person inheriting, but the last place of residence of the deceased person or, in the case of real estate, the canton in which the property is located. This approach thus differs markedly from the basic principle of the other types of tax.

Beneficiaries and degree of kinship

In many cantons, the tax burden depends on the degree of kinship to the deceased person. Direct descendants are often treated differently from more distant relatives or unrelated persons.

Spouses and registered partners also benefit from special rules in numerous cantons. However, these rules are not uniform.

In the case of unrelated persons or inheritances passing to legal entities, different rules may apply, for example with regard to tax-free allowances or applicable rates. Cohabiting partners are also treated differently from canton to canton.

An illustrative example without specific figures: while a bequest to one's own child is given preferential treatment or even treated as tax-free in many cantons, the same bequest to an unrelated third party may be classified quite differently. This distinction shows how strongly the degree of kinship can influence the outcome.

When dealing with an inheritance, it is advisable to clarify at an early stage which canton is responsible, which deadlines apply to any notifications and which documents the tax authority requires. An orderly inventory of the estate makes this process considerably easier.

If several heirs are affected at the same time, early and transparent communication among them is also recommended in order to avoid misunderstandings regarding the allocation of tax obligations.

• Direct descendants and spouses
• Other relatives of varying degrees
• Unrelated persons and institutions

Relationship to gift tax

In addition to inheritance tax, most cantons have a gift tax, which covers transfers of assets made during a person's lifetime. The two taxes are often coordinated with each other.

This can be relevant in estate planning, particularly if early transfers are being considered.

If an asset is transferred during a person's lifetime, this may under certain circumstances be taken into account later when calculating inheritance tax. Careful planning over several years should therefore always keep both types of tax in view.

Why an individual review makes sense

Because of the cantonal differences and the large number of possible constellations, inheritance tax cannot be assessed in general terms. The place of residence of the deceased person, the degree of kinship and the type of assets all play a role.

Have your specific situation reviewed by a specialist, particularly in the case of larger estates or if several cantons are involved.

Typical mistakes in connection with inheritance tax

A common mistake is relying on the rules of another canton or on general statements from acquaintances without checking the cantonal rules that actually apply. Since the design varies considerably, this can lead to false expectations.

The approach to gifts made during a person's lifetime is also occasionally underestimated: anyone who transfers assets early without considering the interaction with a later inheritance tax may unintentionally put themselves at a disadvantage. Coordinating gift planning and estate planning is therefore sensible.

In addition, the importance of a complete inventory of the estate is often underestimated. If important documents relating to assets, debts or earlier bequests are missing, this can delay the settlement and lead to uncertainty in the assessment.

Inheritances with an international dimension

If assets are located abroad or the deceased person's last place of residence was not in Switzerland, foreign inheritance law and any international treaties may also become relevant.

Such constellations are regularly complex, which is why early clarification with a specialist is advisable in order to avoid double burdens or misunderstandings.

Responsibility for the settlement of the estate itself can also be unclear in international cases, for example if real estate is located in several countries or several legal systems simultaneously claim jurisdiction. A coordinated approach among the specialists involved is particularly important in such cases.

What you should check

• Determine the relevant canton and its rules
• Clarify the degree of kinship to the deceased person
• Draw up an inventory of the estate
• Document any gifts made in the past
• Have the will and inheritance contract reviewed
• Consult a specialist at an early stage if you are unsure

Frequently asked questions