Switzerland Inheritance & Estate Tax by Canton: Rates, Exemptions and Planning

Switzerland imposes no federal inheritance tax and no federal estate tax. Every cantonal jurisdiction designs its own regime — who is taxable, at what rates, and which relatives are exempt. Rates range from complete exemption in Schwyz or Obwalden to progressive rates reaching 54% in Geneva for unrelated beneficiaries. For anyone owning assets in Switzerland, or holding company shares through a Swiss structure, understanding the cantonal rules is not optional: the wrong domicile, or the absence of a holding structure, can expose a significant estate to a tax bill that could have been avoided.

This guide covers the full cantonal picture: which cantons tax which heirs, the rates that apply by relationship class, how domicile determines which rules govern movable property, and the planning levers — including holding structures domiciled in Zug — that business owners use to protect the value of a family enterprise across generations.

No Federal Inheritance Tax: The Constitutional Framework

Article 3 of the Swiss Federal Constitution (Bundesverfassung) assigns residual legislative competence to the cantons. In the absence of an explicit federal mandate, the cantons retain sovereign authority over a given tax category. Inheritance and gift taxes have never been harmonised at the federal level, and repeated attempts to introduce a national regime have been blocked by popular vote.

The most recent attempt came with the popular initiative to introduce a 50% federal tax on inheritances and gifts exceeding CHF 50 million, proposed by the Young Socialists (JUSO). The initiative was put to a referendum on 30 November 2025 and was rejected with a decisive majority of 78.3% voting against, with all 26 cantons rejecting it. The result reaffirmed the constitutional status quo: inheritance and gift taxation remains exclusively cantonal.

The practical consequence is that there is no Swiss-wide "estate tax" to plan around. The applicable rules depend entirely on where the deceased was domiciled at death (for movable assets) and where immovable property is located (for real estate). Two individuals with identical estates but different cantonal domiciles can face inheritance tax outcomes that differ by millions of francs.

For a broader overview of how Swiss cantonal and federal taxes interact, see the guide to Swiss taxes and the dedicated article on Swiss corporate tax.

The General Rule: Spouses and Direct Descendants Are Exempt

Across virtually every Swiss canton, transfers to a surviving spouse or registered partner and to direct descendants — children and grandchildren — are either fully exempt from inheritance tax or subject to allowances that render the effective tax negligible. This rule reflects a policy consensus that the succession of family wealth between the closest relatives should not be eroded by tax.

The only cantons that publish a statutory rate applicable to direct descendants are Appenzell Innerrhoden (AI, approximately 1%), Vaud (VD, up to 3.5%), and Neuchâtel (NE, 3%). In practice, the allowances available in these cantons reduce the effective tax on typical family inheritances to a minimal or zero amount. For planning purposes, these three cantons are treated as functionally equivalent to exempt cantons for standard spousal and descendant successions.

The picture changes materially as soon as the inheritance passes to anyone outside the direct family line: siblings, parents, aunts, uncles, nephews and nieces, domestic partners who are not in a registered partnership, carers, friends, or unrelated entities. For these beneficiaries, rates escalate quickly and vary sharply across cantons.

Canton-by-Canton Comparison: Inheritance Tax Rates

The table below sets out the inheritance tax position for the principal cantons, covering the three most relevant beneficiary categories: direct descendants (children/grandchildren), siblings, and unrelated third parties. Rates shown are indicative maximum rates for a substantial inheritance (CHF 500,000+), current as of 2026. Actual liability depends on the specific cantonal tariff, applicable allowances, communal surcharges, and the precise relationship. Cantons calculate their headline maximum differently — some on the base cantonal tariff alone, others including communal surcharges — so confirm the exact figure with the relevant cantonal tax authority (Steueramt) before relying on it in a specific transaction.

The contrast between cantons is pronounced. An unrelated heir inheriting CHF 500,000 in Geneva may face a tax charge that exceeds CHF 215,000. The same inheritance from a Schwyz or Obwalden-domiciled testator generates no inheritance tax liability at all. For siblings, a CHF 500,000 inheritance in Zug attracts approximately one-third of the tax that the same inheritance would attract in Vaud.

Which Canton's Rules Apply: Domicile and Situs

Determining which canton's inheritance tax rules govern a given estate requires applying two separate connecting factors: domicile for movable assets, and situs (location) for immovable property.

Movable assets — cash, securities, company shares, art, vehicles, intellectual property — are governed by the inheritance tax rules of the canton in which the deceased was domiciled (Wohnsitzkanton) at the time of death. If a resident of Zug dies holding a securities portfolio and shares in a Zurich-registered operating company, both assets are subject to Zug's inheritance tax rules.

Immovable property — land, buildings, apartments — is governed by the inheritance tax rules of the canton where the property is located (Lageortskanton), regardless of where the owner was domiciled. An estate containing a Genevan apartment and a Vaud farmhouse will require cantonal inheritance tax declarations in both Geneva and Vaud for those specific assets, even if the deceased was domiciled in Zug.

This situs rule has a direct implication for holding structures. When real estate is contributed to a Swiss holding company and the shares of the holding company are held directly by the individual, the shares are movable assets. On the shareholder's death, the shares pass under the rules of the deceased's domicile canton — not under the rules of the cantons where the underlying properties are located. A Zug-domiciled holding shareholder can therefore achieve Zug inheritance tax treatment for properties situated in Vaud or Geneva, provided the holding structure has genuine substance and was not created purely to circumvent tax.

Inner-Canton Advantage: Zug, Schwyz, Nidwalden, Obwalden

The inner cantons of central Switzerland — Zug, Schwyz, Nidwalden, Obwalden, and Uri — are materially different in their inheritance tax treatment compared to the urban cantons. Their combination of low cantonal income and wealth tax rates with minimal or zero inheritance tax makes them among the most favourable domicile choices in Europe for estate planning.

Zug: Direct descendants and spouses are fully exempt. For siblings, Zug applies a low progressive rate (around 4% effective for CHF 100,000, with allowances). For unrelated heirs, the top rate is around 20%. Zug has no inheritance tax on direct heirs and is the dominant location for international holding companies and business owners seeking both a low corporate tax environment (combined federal and cantonal corporate income tax of approximately 11.71%) and a favourable succession framework.

Schwyz and Obwalden: These two cantons impose no inheritance or gift tax whatsoever, on any heir, regardless of the relationship to the deceased. A sibling, a domestic partner, or an unrelated friend inheriting an estate from a Schwyz-domiciled testator pays zero cantonal inheritance tax. This makes Schwyz and Obwalden the most extreme examples of zero-burden cantons in Switzerland.

Nidwalden: Exempts spouses, direct descendants, and parents in full. Unlike Schwyz and Obwalden, Nidwalden does levy inheritance and gift tax on other heirs, but at flat, moderate rates — around 5% for siblings (after a CHF 20,000 allowance) and 15% for unrelated beneficiaries, as of 2026.

Uri: Exempts direct heirs and applies low rates to more distant relatives. The overall burden for most family successions is minimal.

High-Tax Cantons: Vaud, Geneva, Basel-Stadt

Cantons at the other end of the spectrum — Vaud, Geneva, and Basel-Stadt — apply progressive inheritance tax scales that can be highly material for estates passing outside the immediate family.

Vaud (VD): Vaud publishes some of the highest effective rates for non-relatives among all Swiss cantons. Unrelated heirs can face effective rates approaching 50% for large inheritances once communal surcharges are included. Even siblings face rates that can reach around 25% at the higher end of the progressive scale. Vaud also imposes a nominal rate on direct descendants (up to 3.5%) and applies it to gifts as well as inheritances, though allowances typically reduce the practical burden on direct heirs. Vaud's gift tax rules mirror its inheritance tax rules: gifts made during the testator's lifetime are aggregated with the estate value for purposes of calculating the applicable rate.

Geneva (GE): Geneva applies a progressive inheritance tax scale that begins at 13% for the first bracket of taxable inheritance and reaches 54% at the upper end for unrelated heirs. The scale is graduated by both the amount inherited and the relationship to the deceased. Spouses, registered partners, and direct descendants are exempt. Siblings face rates approximately in the range of 13% to 25%. Geneva also imposes gift tax on lifetime transfers, with the same structure as the inheritance tax.

Basel-Stadt (BS): A progressive scale applies. Unrelated heirs can face effective rates around 30% to 36%. Siblings are taxed at lower rates but meaningfully above the inner-canton level. The canton is an important financial and pharmaceutical centre, and the inheritance tax framework is a recurring consideration for family business successions involving Basel-based companies.

Zurich (ZH): Zurich applies a multiplier-based system. Siblings face a rate multiplied by 3 relative to the base tariff, with a CHF 15,000 allowance. Unrelated heirs face higher multipliers. The effective maximum rate for unrelated heirs can reach approximately 24% to 36% depending on the size of the inheritance. For direct descendants and spouses, Zurich is fully exempt.

Business Succession Planning: Holding Structures and Zug

For entrepreneurs and business owners, the inheritance tax implications of transferring a Swiss operating company are among the most significant estate planning considerations. Without a structure, the shares of a Swiss AG or GmbH form part of the movable estate governed by the deceased's domicile canton. If the shareholder was domiciled in Geneva, Geneva's progressive inheritance tax rates apply to the full value of the shares — even if the business itself is located in another canton.

A Swiss holding company registered in Zug, with the controlling shareholder also domiciled in Zug, addresses this problem at both levels: the holding company itself benefits from the Swiss participation exemption (Beteiligungsabzug) on dividends and capital gains from qualifying subsidiaries, and the shares of the holding company — as movable assets — are governed by Zug inheritance tax rules on the shareholder's death, meaning direct descendants and spouses are fully exempt.

The principal planning tools used in Swiss business succession include:

• ●Holding structure (AG): Operating assets or shares in operating companies are held under a Swiss holding AG in Zug. The holding company provides a separation between the operating business and the family estate, enables structured dividend distribution, and positions the estate as movable assets governed by the shareholder's domicile canton. See the overview of the Swiss holding company structure.
• ●Usufruct (Nutzniessung): The owner retains a lifelong right to the income of the business (or real estate) while transferring the bare ownership (Eigentum) to the next generation. The taxable value of the transfer is reduced by the present value of the retained usufruct. This is one of the most widely used instruments in Swiss succession planning for illiquid family businesses.
• ●Structured gifting: Cantonal gift tax allowances reset periodically (typically every 5 years in cantons that have gift tax). Transferring shares in tranches over time, utilising available allowances, can reduce the overall tax exposure on the estate. Gift tax rules differ significantly by canton: some cantons (Schwyz and Obwalden) impose no gift tax at all; others (Vaud, Geneva) integrate gift and inheritance tax into a single cumulative system.
• ●Domicile planning: A change of domicile to a low-tax or zero-tax canton (Schwyz, Obwalden, Nidwalden, Zug) before the transfer event can eliminate or materially reduce the inheritance or gift tax liability on movable assets. Genuine relocation — with actual physical residence and deregistration from the previous canton — is required. Swiss tax authorities apply a factual assessment of domicile; a formal registration change without genuine residence does not suffice.
• ●Inheritance contract (Erbvertrag): Swiss inheritance law (ZGB Art. 494 ff.) permits binding inheritance contracts that override the statutory intestacy rules. Unlike a will, an Erbvertrag requires notarisation and the agreement of all parties. It is frequently used in family business succession to bind the entrepreneur and heirs to an agreed transfer structure, including staged transfers and conditions on business continuity.

Succession planning should begin at least five to ten years before the intended transfer. Structures put in place close to the transfer event — or within three years of death for domicile changes — are subject to enhanced scrutiny and may be challenged by cantonal tax authorities as abusive.

Gift Tax: The Mirror of Inheritance Tax

In most Swiss cantons that levy inheritance tax, a parallel gift tax (Schenkungssteuer) also applies to lifetime transfers. Gift tax prevents the circumvention of inheritance tax by giving away assets before death. The same rates and exemptions generally apply: a gift to a direct descendant in an exempting canton is tax-free; a gift to a sibling or unrelated third party in Vaud or Geneva is subject to the same progressive scale as an inheritance.

However, gift tax does not perfectly mirror inheritance tax. Cantons differ on:

• ●Aggregation period: Some cantons (including Vaud and Geneva) aggregate gifts made during the last several years of life with the estate value, applying progressive rates to the total. Cantons that do not aggregate allow greater scope for using the annual gift allowance to reduce the estate progressively over time.
• ●Annual or periodic allowances: Several cantons provide a rolling or periodic gift allowance before tax applies. In cantons that reset this allowance every five years, a planned gifting programme can transfer substantial value tax-free over a 10 to 15 year horizon.
• ●Zero-tax cantons: Schwyz and Obwalden impose no gift tax on any recipient, mirroring their zero-inheritance-tax status. Lifetime transfers of any amount to any beneficiary from a domiciliary of these two cantons are free of cantonal gift and inheritance tax.

Note that cantonal gift tax only applies to Swiss-domiciled donors. A foreign-domiciled individual making a gift of Swiss movable assets does not automatically trigger Swiss gift tax — but Swiss immovable property situated in a taxing canton remains subject to that canton's rules regardless of the donor's domicile.

Cross-Border and Non-Resident Estates

Switzerland has concluded a limited number of double taxation agreements (DTAs) specifically covering inheritance and estate taxes. Unlike income tax DTAs — of which Switzerland has an extensive network — inheritance tax DTAs are rare. As of 2026, Switzerland has estate and inheritance tax treaties with ten states: Austria, Denmark, Finland, France, Germany, the Netherlands, Norway, Sweden, the United Kingdom, and the United States. These treaties cover inheritance and estate taxes only — gift taxes fall outside all of them. The current list is maintained by the State Secretariat for International Financial Matters (SIF); confirm the treaty status for a specific country before relying on it, as some older conventions have limited practical effect where the other state no longer levies inheritance tax.

In the absence of an applicable DTA, cantonal inheritance tax may apply to a non-resident deceased's Swiss assets. Specifically:

• ●Swiss immovable property situated in a taxing canton is subject to that canton's inheritance tax regardless of where the deceased was domiciled.
• ●Swiss company shares held by a non-resident deceased are generally not subject to Swiss inheritance tax (they are movable assets governed by the deceased's domicile state), unless the shares are in a company holding predominantly Swiss real estate — in which case some cantons assert a situs-based claim.
• ●Where a DTA applies, it typically determines primary taxing rights between the two contracting states and may provide for tax credits to avoid double taxation on the same inheritance.

Conversely, Swiss-domiciled individuals who own property or assets in foreign jurisdictions may be subject to inheritance tax in those jurisdictions under the local rules. Switzerland's inheritance tax treatment of the Swiss movable estate does not extinguish foreign tax obligations on foreign assets.

For the broader Swiss tax framework, see the guides to Swiss taxes and Swiss corporate tax. Business owners evaluating a holding structure for succession purposes should review the dedicated guide to the Swiss holding company.

Goldblum & Partner AG has advised international clients on Swiss inheritance tax planning, holding structures, and business succession from Baarerstrasse 25, 6300 Zug since 2007. Contact us for a confidential consultation on the cantonal inheritance tax position applicable to your estate.

Legal note: Cantonal inheritance tax rates and exemptions are subject to change and vary in detail across individual cases. Rate figures in this article are indicative only and should be verified with the relevant cantonal tax authority or a qualified Swiss tax adviser before relying on them in a specific estate or succession matter. This article does not constitute legal or tax advice.