Inheritance tax in Switzerland: what you need to know about estate taxation

Inheritance taxation in Switzerland: a cantonal system

In Switzerland, there is no federal inheritance tax. Each canton has its own tax legislation regarding inheritance. This autonomy creates considerable differences between regions.

Some cantons heavily tax indirect inheritances, whilst others have completely abolished inheritance tax for direct descendants. The deceased's place of residence determines which tax authority has jurisdiction.

This cantonal disparity sometimes influences the choice of residence of people planning their estate. To understand the general rules that apply before taxation, consult our complete guide to inheritance in Switzerland.

Who pays tax on an inheritance?

Inheritance taxation depends primarily on the relationship with the deceased. In the majority of Swiss cantons, direct heirs benefit from total exemption.

Generally exempt from inheritance tax:

• The surviving spouse and registered partner
• Direct descendants (children, grandchildren)
• The deceased's parents in certain cantons

On the other hand, brothers and sisters, nephews and nieces, as well as people with no family relationship are often taxed, sometimes at high rates. Cohabitants remain fiscally disadvantaged in most cantons, except for specific testamentary provisions.

Tax rates by canton: a contrasting overview

The differences between cantons are spectacular. Schwyz and Obwalden do not tax any inheritance, regardless of the relationship. Conversely, some cantons apply inheritance tax that can reach 50% for distant heirs.

Examples of maximum rates for non-direct heirs:

• Vaud: up to 36% for collaterals
• Geneva: up to 54% for non-relatives
• Neuchâtel: up to 37% depending on the amount
• Fribourg: up to 26% for brothers and sisters

These rates apply progressively according to the inherited value and degree of relationship. Cantonal taxation evolves regularly, with several cantons having recently abolished or reduced their inheritance taxes.

Cantons without tax on direct inheritances

A trend has emerged in recent years: many cantons have completely abolished the taxation of inheritances in the direct line.

Cantons exempting direct descendants and spouses:

• Schwyz (no inheritance tax)
• Obwalden (no inheritance tax)
• Uri, Glarus, Zug, Solothurn, Schaffhausen
• Appenzell Innerrhoden and Ausserrhoden
• Lucerne, Nidwalden, Graubünden

This evolution reflects a political will to favour intrafamily wealth transfer and to attract new wealthy taxpayers.

Cantons with progressive taxation

The French-speaking cantons generally maintain progressive inheritance taxation, even if direct descendants are often exempt.

Vaud: Exemption for descendants and spouse. Brothers/sisters taxed from 6% to 22% depending on the amount. Nephews/nieces from 12% to 36%.

Geneva: Descendants and spouse exempt. Progressive rates from 13% to 54% for other heirs depending on value and relationship.

Neuchâtel: Spouse and descendants exempt. Other heirs taxed progressively up to 37%.

These scales generally include allowances and exemptions that reduce the effective taxation.

How is inheritance tax calculated?

Inheritance tax is calculated on the net value of the share inherited by each beneficiary. All the deceased's debts are first subtracted from the estate assets.

Elements taken into account in the calculation:

• Real estate (tax or market value)
• Bank accounts and cash
• Securities (shares, bonds)
• Movable property (vehicles, furniture, valuables)

Authorised deductions:

• Deceased's debts
• Funeral expenses
• Final illness expenses

To understand how to manage all debts, consult our guide on a deceased person's debts.

Possible tax exemptions and reductions

Beyond exemptions related to kinship, several mechanisms allow you to reduce inheritance tax in Switzerland.

Common exemptions:

• Non-taxable minimum amount (variable threshold depending on cantons)
• Progressive allowances according to degree of relationship
• Reductions for family responsibilities (dependent minor children)
• Deductions for disabled persons

Special cases:

• Usufruct: only bare ownership may be taxed
• Agricultural property: preferential schemes in certain cantons
• Family businesses: partial exemptions under conditions

These provisions vary considerably from one canton to another and often require personalised analysis.

Gifts and inheritances: what tax difference?

Transferring during one's lifetime by gift or waiting until death produces different tax effects depending on the canton.

In most cantons, gifts are taxed similarly to inheritances. The main advantage lies in staggering: giving progressively sometimes allows you to benefit several times from exemptions.

Gift with reserved usufruct: You transfer ownership whilst retaining use of the property (housing) or income (investments). This technique combines early transfer and personal security.

Some cantons tax gifts more favourably than inheritances, others apply the same rates. Tax planning requires canton-by-canton analysis.

Special cases and complex situations

Some inheritance situations present specific tax issues that go beyond the standard cantonal framework.

Heirs abroad: They remain taxable in Switzerland if the deceased resided there. Tax treaties avoid double taxation in certain countries.

Property in several cantons: Each canton taxes property located on its territory according to its own rules.

Life insurance: Capital paid to beneficiaries may be exempt or taxed differently depending on the canton. Consult our guide on life and death insurance for details.

Family businesses: Preferential schemes exist to facilitate transfer without penalising economic continuity.

How to anticipate and optimise inheritance taxation

Early tax planning allows you to legally reduce the tax burden whilst respecting everyone's rights.

Planning tools:

• Will: direct distribution towards exempt heirs
• Inheritance pact: organise transfer with heirs' agreement
• Staggered gifts: benefit several times from exemptions
• Life insurance: transfer capital outside the estate
• Change of residence: to a more fiscally advantageous canton

Caution: all planning must respect legal reserved portions. A notary or tax specialist helps you optimise your situation. To understand the overall timeline, consult our guide on deadlines and steps for settling an estate.

When and how to declare an inheritance?

Heirs have an obligation to declare the estate to the cantonal tax authority, even in the absence of inheritance tax to pay.

Declaration deadlines: Variable depending on cantons, generally between 1 and 6 months after death or the issuance of the certificate of inheritance.

Required documents:

• Detailed estate inventory
• Certificate of inheritance
• Real estate valuations
• Bank statements on the date of death
• Supporting documents for deductible debts and expenses

Consequences of delay: Fines, late payment interest, or even ex officio taxation by the tax administration.

The tax authority examines the declaration, may request additional information, then establishes the final assessment.

Inheritance taxation in Switzerland is based on a cantonal system that creates significant differences depending on your place of residence. Spouses and direct descendants generally benefit from total or partial exemptions, whilst other heirs may face variable tax rates. Understanding your canton's rules, anticipating tax charges and exploring planning options allows you to transfer your estate under the best conditions.

Beyond tax aspects, settling an estate involves numerous administrative and emotional procedures. Informing loved ones of the death remains an essential priority in this process. Wolky supports you by offering a simple and accessible solution to publish an obituary online for 180 CHF, create a memorial page and easily share the information with those around you. A dignified and modern way to honour the memory of a loved one whilst facilitating difficult procedures.