SWITZERLAND Law and Practice Contributed by: Olivier Sigg and Quentin Thorens, Walder Wyss
10. Fiduciary Regulation, Standards and Taxation 10.1 Corporate and Professional Fiduciaries In Switzerland, corporate and professional fiduciaries serving as trustees are generally subject to licensing requirements. The licence is granted by the Swiss Financial Market Supervisory Authority (FINMA) and is subject to the fulfilment of cumulative conditions. In particular, professional fiduciaries must be regis- tered in the Swiss Commercial Register and comply with specific organisational, governance and finan- cial requirements, including minimum equity capital thresholds. Moreover, professional fiduciaries are required to affiliate with a supervisory organisation that is itself licensed and overseen by FINMA. Accordingly, professional fiduciaries are subject not only to private law liability but also to public law super- vision and regulatory oversight. Switzerland allows for the establishment of Private Trust Companies (PTCs). However, PTCs are in prin- ciple also subject to licensing by FINMA, although an exemption from prudential supervision may be avail- able under certain conditions. In addition, PTCs must affiliate with a self-regulatory organisation within the meaning of the Swiss Anti-Money Laundering Act. 10.2 Taxation of Trusts Under Swiss tax law, the residence of the trustees is generally not decisive for the taxation of a trust. Instead, Swiss tax practice typically attributes the trust assets and income to either the settlor or the beneficiaries, depending on the structure of the trust (eg, revocable vs irrevocable, discretionary vs fixed interest). However, the residence of the trustees may create a tax nexus in certain circumstances, particularly where the trust assets are held through holding or operat- ing companies effectively managed by Swiss-resident trustees. In such cases, the place of effective man- agement could be considered to be in Switzerland, potentially triggering Swiss corporate tax and with- holding tax liability.
Nonetheless, only the underlying company could qualify as a Swiss tax resident and not the trust.
11. Planning for Non-Traditional Families 11.1 Succession Rights and Estate Taxes for Non-Traditional Families Under Swiss inheritance law, the situation of so-called non-traditional families depends largely on the family structure in question. Some enjoy protection equiva- lent to that of traditional families, while others have no special protection. With regard to same-sex couples, same-sex marriage is recognised in Switzerland and has the same effects as heterosexual marriage. This equality extends in particular to inheritance rules and the resulting tax consequences. There is, therefore, no difference of treatment of same-sex couples. Children born out of wedlock benefit from the same legal status and inheritance rights as children born within marriage, provided that paternity has been legally recognised by the father, which is not auto- matic outside marriage. Adopted children also enjoy full protection equivalent to that of biological children, whether they are adopt- ed by same-sex or heterosexual couples. On the other hand, unmarried partners do not enjoy any legal inheritance protection. In particular, they are not each other’s heirs in the event of intestacy and must therefore make specific inheritance plans if they wish to pass on assets to each other. This lack of status can also have significant tax consequences: several cantons provide for total exemption or very low taxation for married couples, while no comparable measures exist for unmarried couples. The situation of surrogate children is also complex, as surrogacy is not authorised in Switzerland. However, some Swiss couples resort to surrogacy abroad. In most cases, only one of the parents (who has bio- logical or legal connection to the child according to Swiss law) is recognised as the legal parent under
185 CHAMBERS.COM
Powered by FlippingBook