Inheritance is one of the most overlooked aspects of buying property in Switzerland. Foreign buyers focus on the purchase (as they should) but rarely think about what happens to the property when they die. Swiss succession law has features that may surprise owners from common-law jurisdictions, and cross-border estates add complexity.
This is not legal advice. It is a guide to the issues you should discuss with a qualified lawyer before or shortly after purchasing.
Swiss Forced Heirship (Pflichtteil)
The Core Rule
Swiss law protects certain heirs by guaranteeing them a minimum share of the estate. You cannot disinherit them entirely, regardless of what your will says.
Protected heirs and their minimum shares (as of 2023 reform):
| Heir | Pflichtteil (Minimum Share) |
|---|---|
| Spouse / registered partner | 50% of their legal share |
| Children (descendants) | 50% of their legal share |
| Parents | No longer protected (removed in 2023 reform) |
The legal shares (what heirs would receive without a will):
| Situation | Spouse | Children |
|---|---|---|
| Spouse and children | 50% | 50% (divided equally) |
| Spouse, no children | 75% | — |
| Children, no spouse | — | 100% (divided equally) |
The Pflichtteil is calculated on these legal shares. So if you have a spouse and two children:
- Spouse's legal share: 50%. Pflichtteil: 25% of the estate.
- Each child's legal share: 25%. Pflichtteil: 12.5% of the estate each.
- Freely disposable share: 50% of the estate.
The 2023 reform increased the freely disposable share by removing parents as protected heirs and reducing children's Pflichtteil from 75% to 50% of their legal share.
Why This Matters for Property
If your Swiss property is a significant portion of your estate, forced heirship may require:
- The property to be sold to satisfy multiple heirs' claims
- One heir to "buy out" others at market value
- Complex arrangements to keep the property in the family
Planning for this before purchase, not after death, is essential.
Cross-Border Succession
Which Law Applies?
For Swiss residents, Swiss succession law applies by default. But foreign nationals have options:
- Swiss nationals: Swiss law applies.
- Foreign nationals resident in Switzerland: Swiss law applies by default, but you may elect the law of your country of nationality in your will.
- Foreign nationals not resident in Switzerland (property owners): The law of the country where the deceased was last domiciled generally applies, but Swiss courts may apply Swiss law to immovable property located in Switzerland.
The EU Succession Regulation (Brussels IV)
EU nationals benefit from EU Succession Regulation 650/2012, which allows them to choose between:
- The law of their habitual residence (Switzerland, if they live here), or
- The law of their nationality
This choice is made in the will and can simplify cross-border succession significantly.
Note: Switzerland is not an EU member, but Swiss courts recognise the Regulation's applicability for EU nationals.
UK and US Nationals
Post-Brexit, UK nationals cannot rely on the EU Succession Regulation. US nationals face a different system entirely (state-level succession law). Both should obtain specialist cross-border advice.
Inheritance Tax
Federal Level
Switzerland has no federal inheritance tax. The 2015 initiative to introduce one was rejected by voters.
Cantonal Level
Each canton sets its own inheritance tax rules:
Canton Bern:
- Spouse / registered partner: Exempt
- Children: Exempt
- Siblings: Taxed (rates vary)
- Unrelated heirs: Taxed (higher rates)
Canton Vaud (relevant for Rougemont property):
- Similar structure: spouse and children exempt, others taxed
- Rates differ from Bern
The exemption for spouse and children means that for the most common inheritance scenarios, no cantonal inheritance tax is due.
Double Taxation
For foreign nationals, inheritance may be taxable in both Switzerland and their home country. Switzerland has double taxation agreements with many countries that address this, but coverage is not universal.
Key treaties relevant to Gstaad buyers:
- Switzerland-UK: Covers inheritance tax (estate duty)
- Switzerland-US: No comprehensive inheritance tax treaty exists. US citizens are taxed on worldwide estates regardless.
- Switzerland-France: Covers inheritance tax
- Switzerland-Germany: Covers inheritance tax
Estate Planning Strategies
Write a Swiss Will
Even if you have a will in your home country, a separate Swiss will (or a codicil specifically addressing Swiss property) is advisable. It should:
- Be in one of Switzerland's official languages (or English with certified translation)
- Comply with Swiss formal requirements (handwritten, dated, and signed)
- Specify the applicable law (if you are choosing your nationality's law under EU Succession Regulation or similar)
- Address the Swiss property specifically
- Be compatible with (not contradictory to) your home-country will
Consider Ownership Structure
How the property is held affects succession:
- Individual ownership: Subject to the owner's succession law. Simplest but least flexible.
- Joint ownership (Gesamteigentum): Typically between spouses. Surviving spouse's share is not part of the estate.
- Co-ownership (Miteigentum): Each party owns a defined share, which passes through their estate independently.
- Company ownership: In some cases, holding through a Swiss company can provide succession flexibility. But Lex Koller restricts this for foreign buyers of residential property.
Life Insurance and Beneficiary Designations
Swiss life insurance payouts can be directed to named beneficiaries outside the estate. This can be used to balance the estate: the property goes to one heir, the insurance payout to others.
Marriage Contract (Ehevertrag)
Swiss and foreign couples can use a marriage contract to structure property ownership between spouses. This can increase the surviving spouse's share beyond the default legal allocation, reducing forced-heirship claims from children.
Usufruct (Nutzniessung)
A common arrangement: one spouse inherits ownership, the other receives a usufruct (right to use and benefit from the property for life). This allows the surviving spouse to continue living in the property without full ownership, which may have tax and succession advantages.
Practical Steps
- Consult a Swiss succession lawyer before or shortly after purchasing
- Draft a Swiss will that addresses the property
- Coordinate with your home-country estate plan to ensure consistency
- Review ownership structure with tax and legal advisors
- Discuss forced heirship with your family to manage expectations
- Keep records of all property costs (renovation, improvements) for gains tax purposes at eventual sale by heirs
Frequently Asked Questions
Can I leave my Swiss property to anyone I choose? Only the freely disposable share. Spouse and children have protected minimum shares (Pflichtteil) under Swiss law, unless you elect a different national law that permits more freedom.
Do my children have to pay inheritance tax in Switzerland? In Canton Bern and most Swiss cantons, children are exempt from cantonal inheritance tax.
What happens if I die without a Swiss will? Swiss intestacy rules apply to the Swiss property. The legal shares go to spouse and children by default. This may conflict with your intentions and with arrangements in your home country.
Can I hold Swiss property in a trust? Switzerland does not have a domestic trust law, though it recognises foreign trusts under the Hague Trust Convention. Holding Swiss residential property in a trust can be complicated by Lex Koller and should only be considered with specialist advice.
For a confidential conversation about your search or sale, contact The Gstaad Collection.