SWITZERLAND Trends and Developments Contributed by: Giovanna Bonafede, Manuela Brenneis-Hobi, Prof Dr Annette Spycher and Vanessa Thompson, Kellerhals Carrard
agreement. In contrast, for cohabiting partners, only the consent of the person(s) registered as the tenant(s) is legally required. Disparities are even more pronounced in matters of greater legal significance, particularly in the event of the death of one partner. In such circumstances, cohabiting partners have no (automatic) entitlement to a widow’s or widower’s pension and, in the absence of a will or other testamentary disposition, no statutory right to inherit. While cohabiting partners do not benefit from a com ‑ prehensive statutory framework, they may mitigate certain legal disadvantages by entering into a cohab ‑ itation contract. Such a contract may, for example, provide for financial compensation in favour of the partner who wholly or partially relinquishes gainful employment to care for the children. Within the limits imposed by Article 20 of the Swiss Code of Obliga ‑ tions (nullity) and Article 27 paragraph 2 of the Swiss Civil Code (prohibition of excessive personal commit ‑ ment), cohabiting partners enjoy broad contractual freedom with regard to the content of the agreement. However, for example, “alimony” payments between unmarried persons may be considered as gifts by the tax authorities, thereby creating an important tax bur ‑ den for the recipient. Tax Issues Married couples in Switzerland are jointly taxed. This means that their incomes are combined for tax pur ‑ poses, which often results in a higher tax burden due to progressive income tax rates. This phenomenon is commonly referred to as the “marriage penalty.” Cohabiting partners, by contrast, are treated as single persons for tax purposes and are taxed separately. Due to the tax disadvantages associated with mar ‑ riage, some couples choose not to get married. There are also married couples who choose to divorce while continuing to live together as a cohabiting couple. However, the tax authorities generally recognise a separation only where the spouses have and maintain separate residences. Otherwise, the arrangement may be regarded as tax avoidance. Even where a court- approved separation agreement is in place, joint taxa ‑
tion generally continues if the spouses still share the same household. Inheritance Rights As mentioned above, Swiss law does not provide any legal right of inheritance for cohabiting partners. This means that unmarried partners are not entitled to any portion of the deceased partner’s estate by default. For a partner to be entitled to inherit, it is essential to name them explicitly as an heir in a will or inheritance contract, respecting the compulsory statutory shares of certain other heirs, such as descendants. Additionally, most Swiss cantons impose inheritance taxes on cohabiting partners, which usually do not apply to married spouses. Depending on the canton and the amount of the inheritance, these taxes can be significant and should therefore be taken into account as part of estate planning. To ensure the mutual protection of life partners, testa ‑ mentary provisions and agreements are often outlined in an inheritance contract that can only be amended or revoked by mutual consent. This approach allows the partners to ensure that the agreed-upon terms remain valid even after the death of one partner and, in some cases, even after a dispute. A particularly important aspect of such a contract is the inclusion of provisions governing its termination and a clear definition of the conditions under which the inheritance arrangements cease to apply, such as in the event of separation, significant conflict, or a specific circumstance. Such clauses typically include clear provisions regarding the requirements for a notice of termination or, alternative ‑ ly, refer to a court decision to ensure legal certainty. Joint Property Unlike in marriage, there is no legal basis for compen ‑ sation or profit-sharing between cohabiting partners if one partner makes investments or contributions to the other partner’s assets. However, legal precedent has established that cohabitation arrangements might be classified as a “simple partnership” under Swiss law, provided the partners demonstrated a mutual economic purpose and co-operation. In such cases, each partner is generally entitled to reclaim their con ‑ tributions, and any resulting profits or losses are to be shared between the partners proportionately.
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