Inheritance Tax for EU citizens in Swiss Accounts

Hello,

I would like to know if there is Swiss inheritance tax for EU citizens in accounts maintained in Swiss Banks.

If a father and a son have a joint account in Switzerland with exactly the same rights in the management of the account, what will happen when the father dies?

Is the son going to pay inheritance tax in Switzerland?

Both the father and the son are citizens of a EU country and they reside permanently in that EU country and have been in Switzerland only as tourists 10 years ago.

Of course the son will have to pay inheritance tax in his home/EU country where he resides.

Thank you

Hi there,

Swiss taxes generally do not apply to individuals who do not live or work in Switzerland. With the exception of Swiss real estate, assets held in Switzerland but belonging to non-residents are not eligible for taxation in Switzerland. These should be taxed in the bequeathers and/or heirs country of residence. The same applies to gift taxes, when these apply.

It is important to note, however, that some Swiss banks freeze the assets in joint accounts upon the death of one account holder. This is done to insure that the assets of the deceased are passed on to their legal heirs. When this occurs, the bank will normally require account co-holders to provide a certificate of inheritance (from your country of residence, for example). The process involved in determining the eligibility of account co-holders to access joint accounts can be lengthy, which can be problematic if account co-holders require constant access to account assets.

Not all Swiss banks freeze joint accounts upon the death of an account holder. In this case, the onus rests on account co-holders to insure that assets are distributed according to relevant inheritance laws. Consider asking your bank whether or not they freeze joint accounts upon the death of one account co-holder.

Providing one or more parties with a power of attorney over an account offers an alternative to using a joint account. In this case, the account is opened in the name of the person who will ultimately own the assets. This person gives a power of attorney to the other parties to who they wish to grant access to their account. The death of a person who holds a power of attorney does not generally affect the operation of the bank account, so the account holder retains full control of the account.

Best regards from Moneyguru

More on this topic:
Swiss tax forum