What is inheritance tax in Switzerland
There is no federal inheritance tax in Switzerland. The taxation of inheritances falls exclusively under cantonal (and partly communal) jurisdiction, which creates an extremely varied landscape: some cantons levy no tax at all on direct heirs, while others apply significant rates even to children.
Inheritance tax applies to the transfer of assets upon death. The amount owed depends on three main factors: the degree of kinship between the deceased and the beneficiary, the value of the inherited share, and the canton of the deceased's last domicile.
Unlike many European countries where a uniform national tax exists, the Swiss system rewards inter-cantonal tax competition. For this reason, estate planning can generate very significant tax savings, in a completely legal manner.
How the system works
Swiss inheritance tax is based on fundamental principles that distinguish it from other countries:
Cantonal jurisdiction
The tax is levied by the canton of the deceased's last domicile. For real estate located in another canton, the tax is owed to the canton where the property is situated.
Tax on individual shares
Switzerland taxes the individual inherited shares received by each beneficiary (Erbanfallsteuer), not the estate as a whole. Each heir pays based on their own share.
Progressive rates by kinship
The rate increases with the distance of the family relationship: spouses and children are often exempt, siblings pay more, and unrelated persons face the highest rates.
No federal tax
The Confederation does not levy any tax on inheritances. Jurisdiction is entirely cantonal, with enormous differences between one canton and another.
Who is subject to the tax
The obligation to pay inheritance tax depends on the canton and the relationship with the deceased:
- Surviving spouse and registered partner: exempt in the vast majority of cantons (25 out of 26)
- Direct descendants (children, grandchildren): exempt in many cantons (including ZH, BE, LU, SZ, ZG, AG), but taxed in others (VD, NE, AI)
- Parents of the deceased: variable treatment, often with reduced rates or high allowances
- Siblings, nieces and nephews (collateral relatives): taxed in most cantons at intermediate rates (5–20%)
- Unrelated persons and cohabitants: subject to the highest rates in almost all cantons (up to 40% in some cases)
Note: a cohabitant (unregistered partner) is treated fiscally as a stranger in most cantons, even after decades of cohabitation. Only a few cantons provide specific benefits.
Main exemptions and allowances
Exemptions vary enormously from canton to canton. Here are the most common categories:
Spouse and registered partner
Exempt in 25 out of 26 cantons. The only partial exception is the Canton of Solothurn, which provides a very high allowance. Spousal exemption is the most uniform principle in the Swiss landscape.
Direct descendants (children)
Exempt in about two-thirds of cantons (including ZH, BE, LU, SZ, ZG, SG, AG, TG, GR). In cantons that tax children (e.g. VD, NE, AI, JU), rates are generally low (1–3.5%) with significant allowances.
Amount-based allowances
Many cantons provide fixed allowances below which no tax is due. For example, in the Canton of Bern direct descendants benefit from an allowance of CHF 12,000, in the Canton of Vaud CHF 50,000.
Donations to public benefit entities
Bequests to recognised charitable foundations and associations are generally exempt from inheritance tax in all cantons.
Business assets
Some cantons provide reductions or exemptions for the transfer of family businesses to descendants, in order to promote business continuity.
Life insurance
In several cantons, life insurance benefits paid directly to the beneficiary do not form part of the estate and may be exempt or benefit from specific allowances.
Cantonal table: rates compared
Below is a simplified overview of the maximum rates applied by beneficiary category in all 26 Swiss cantons. Actual rates may vary based on the amount of the inherited share and communal legislation.
| Canton | Spouse | Children | Unrelated |
|---|---|---|---|
| Zurich | Exempt | Exempt | Up to 36% |
| Bern | Exempt | Exempt (CHF 12,000 allowance) | Up to 40% |
| Lucerne | Exempt | Exempt | Up to 40% |
| Uri | Exempt | Exempt | Up to 25% |
| Schwyz | Exempt | Exempt | No tax (0%) |
| Obwalden | Exempt | Exempt | Up to 20% |
| Nidwalden | Exempt | Exempt | Up to 15% |
| Glarus | Exempt | Exempt | Up to 30% |
| Zug | Exempt | Exempt | Up to 20% |
| Fribourg | Exempt | Exempt | Up to 30% |
| Solothurn | High allowance | Exempt | Up to 30% |
| Basel-Stadt | Exempt | Exempt | Up to 30% |
| Basel-Landschaft | Exempt | Exempt | Up to 30% |
| Schaffhausen | Exempt | Exempt | Up to 32% |
| Appenzell Ausserrhoden | Exempt | Exempt | Up to 30% |
| Appenzell Innerrhoden | Exempt | 1–4% | Up to 32% |
| St. Gallen | Exempt | Exempt | Up to 30% |
| Graubünden | Exempt | Exempt | Up to 25% |
| Aargau | Exempt | Exempt | Up to 30% |
| Thurgau | Exempt | Exempt | Up to 28% |
| Ticino | Exempt | Exempt | Up to 41% |
| Vaud | Exempt | Up to 3.5% (CHF 50,000 allowance) | Up to 25% |
| Valais | Exempt | Exempt | Up to 25% |
| Neuchâtel | Exempt | 3% (with CHF 50,000 allowance) | Up to 35% |
| Geneva | Exempt | Exempt | Up to 26% |
| Jura | Exempt | 2–3% | Up to 35% |
The rates shown are indicative and correspond to the maximum applicable values. The actual tax may vary based on allowances, communal deductions and the amount of the inherited share. We recommend consulting the current cantonal legislation or a tax adviser.
Estate planning strategies
There are several legal strategies to optimise inheritance tax in Switzerland:
Choice of domicile
Moving to a canton with favourable inheritance taxes is the most direct strategy. Cantons such as Schwyz, Obwalden and Nidwalden levy no tax or apply very low rates. This relocation must be genuine (actual domicile, not fictitious).
Staggered lifetime gifts
In many cantons gift tax is identical to inheritance tax. However, distributing wealth through multiple gifts over time can allow you to use allowances and lower progressive rates multiple times.
Life insurance
Designating life insurance beneficiaries can allow capital to be transferred outside the estate, with preferential tax treatment in several cantons.
Inheritance agreements and wills
A well-structured inheritance agreement can optimise the distribution of assets among heirs, reducing the overall tax impact. A will allows bequests to be allocated in the most tax-efficient way possible.
Generational business transfer
For family businesses, planning the generational transfer in advance allows you to benefit from specific cantonal concessions and structure the transition through holding companies or staggered transfers.
Practical tips
- Always check the regulations of the canton of the deceased's last domicile: that's what applies, not the canton where the heirs reside
- For real estate located in a different canton from the domicile, the tax is calculated according to the rules of the canton where the property is situated
- If you are a cohabitant, consider registering your partnership to benefit from the exemptions provided for registered partners
- Gifts made in the last 5–10 years before death may be added back to the estate in some cantons — plan well in advance
- Have your assets valued by a professional to avoid challenges from the tax authority on the taxable base
- Use AccountEX to keep track of assets, real estate and insurance policies: when the time comes, you'll have complete and up-to-date documentation
- Consult a tax adviser specialising in estate planning to structure the wealth transfer in the most tax-efficient way
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