SWITZERLAND Law and Practice Contributed by: Olivier Sigg and Quentin Thorens, Walder Wyss
canton to canton. For inheritance and estate tax, unlimited tax liability generally arises if the deceased’s last domicile was in Switzerland, resulting in Swiss taxation on the worldwide estate. If the domicile is abroad, Switzerland may levy tax only on Swiss-sit- uated assets, notably Swiss real estate or business assets. Regarding wills, a person domiciled in Switzerland may dispose of their worldwide estate by will under Swiss law, barring immovable property abroad where the local “lex rei sitae” applies. Foreign residents in Switzerland may elect their national law for succes- sion, provided that certain conditions are met. For inheritance claims, Swiss courts generally have jurisdiction if the deceased was domiciled in Switzer- land at death. In some specific cases, Swiss courts of the place of origin of the deceased, as well as Swiss courts at the location of assets, can have jurisdiction. For divorce claims, Swiss courts generally have juris- diction if at least one spouse’s domicile is in Switzer- land. In some specific cases, Swiss courts of the place of origin of either spouse, as well as Swiss courts of the place of celebration of marriage can have jurisdic- tion. 2.2 Income Tax Residency Swiss tax law sets out two grounds for unlimited sub- jection to income tax (tax residency). The first one is the tax domicile of the taxpayer. In this regard, an individual is considered domiciled in Switzerland for tax purposes if they live there with the intention of set- tling permanently. This requires the fulfilment of two conditions: • an objective condition: factual physical presence in Switzerland; and • a subjective condition: the intention to settle per- manently, meaning that the individual’s centre of vital interests is located in Switzerland. The objective condition is quite easily met; however, the subjective condition requires various factors to be taken into account, such as family, social life and professional activities. Family relationships generally prevail over other connecting factors for children and
married individuals. By contrast, for single or unmar- ried individuals, professional activities typically take precedence over other factors. The second basis for unlimited subjection to income tax is a stay in Switzerland. A taxpayer is deemed as a tax resident if they reside in Switzerland for a continuous period of 90 days without gainful activity or for a continuous period of 30 days with a gainful activity. The requirement of continuity is generally not fulfilled if the taxpayer leaves Switzerland frequently during the relevant period, even for short periods of only a few days. 3. Intestacy and Forced Heirship Laws 3.1 Intestate Succession Swiss intestate succession is structured according to a parental system divided into three groups: • First group: The descendants inherit the entire estate in equal parts, subject to the spouse’s rights. • Second group: Where the deceased is not survived by any issue, the estate passes to the parental line, subject to the spouse’s rights. The father and mother each inherit one half of the estate. A prede- ceased parent is replaced by their issue. • Third group: Where the deceased is survived by neither spouse, issue nor heirs in the parental line, the estate passes to the line of the grandparents. Where the grandparents of the paternal and mater- nal lines survive the deceased, they inherit in equal parts on both sides. A predeceased grandparent is replaced by their issue. As for the surviving spouses, they receive: • one-half of the estate, where they are obliged to share with the deceased’s issue; • three-quarters of the estate, where they are obliged to share with heirs in the parental line; or • the entire estate, where no heirs exist in the paren- tal line either. Where the deceased leaves no heirs, their estate passes to the canton in which they were last resident
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