Germany–Switzerland · Relocation planning
Gift tax · Timing · Wealth successionMaking a gift before moving to Switzerland
Anyone moving from Germany to Switzerland who already intends to transfer assets to children or other family members should plan the timing of the gift carefully. A gift made before departure will generally still fall within unlimited German gift tax liability. However, postponing the transfer until after the move often does not eliminate German tax liability: if the recipient remains in Germany, their German residence alone is sufficient. If the donor is a German national, they also generally continue to be treated as a German resident for inheritance and gift tax purposes for five years after departure. At the same time, making the gift only after moving to Switzerland may additionally trigger Swiss cantonal gift tax.
The initial question
Should assets be given away before moving to Switzerland?
There is no universal answer. The departure date alone does not determine the gift tax treatment.
For German tax purposes, the first step is to establish whether either the donor or the recipient is still treated as a German resident within the meaning of Section 2 of the German Inheritance and Gift Tax Act (ErbStG) when the gift is made.
If even one of them qualifies as a German resident for these purposes, the entire acquisition is generally subject to unlimited gift tax liability.
It is therefore particularly important to establish who is moving abroad, who is staying in Germany, the nationalities of those involved and which assets are to be transferred.
Making a gift while still in Germany
Unlimited German gift tax liability generally applies before departure
If the gift is completed while the donor still has a residence or habitual abode in Germany, the donor qualifies as a German resident under Section 2 ErbStG.
The entire acquisition therefore generally falls within the scope of German gift tax, regardless of whether German, Swiss or other foreign assets are transferred.
This also applies, for example, to Swiss bank deposits, foreign securities portfolios and shares in a Swiss company.
- Donor still resident in Germany
- Unlimited gift tax liability
- Worldwide assets received are within scope
- German tax allowances apply
- Previous acquisitions within ten years must be considered
Making a gift after arrival
Moving to Switzerland does not automatically end German gift tax liability
It is often assumed that a gift made after moving to Switzerland is no longer subject to German gift tax. In many cases, this is incorrect.
Under Section 2 ErbStG, unlimited tax liability requires only that either the donor or the recipient qualifies as a German resident at the relevant time.
If only the donor moves to Switzerland while the child continues living in Germany, unlimited German gift tax liability therefore generally continues to apply.
The child’s German residence can negate the intended gift tax benefit of moving
If the recipient lives in Germany, the fact that the donor has already moved to Switzerland is generally irrelevant to the personal scope of German gift tax liability. The recipient’s German residence is generally sufficient to establish unlimited tax liability.
Section 2(1) no. 1(b) ErbStG
German nationals generally remain within the resident tax rules for five years after departure
The German Inheritance and Gift Tax Act contains a special extension of personal tax liability for German nationals.
A German national who completely gives up their German residence generally continues to be treated as a German resident for these purposes until they have lived permanently abroad for more than five years.
If a German donor moves to Switzerland and, for example, gives a securities portfolio to a child living abroad one year later, unlimited German gift tax liability may therefore still apply.
The departure date does not automatically start an immediate tax-free period
The five-year rule is a central consideration in succession planning, particularly for wealthy German nationals. Simply postponing a gift until a few months after the move will generally not eliminate German tax liability.
The five-year rule is separate from exit taxation under Section 6 AStG
Section 6 of the German Foreign Tax Act (AStG) concerns, in particular, certain corporate shareholdings when moving abroad. The five-year rule discussed here instead derives from Section 2 ErbStG and concerns personal inheritance and gift tax liability. These two sets of rules must be assessed separately.
Recipient remains in Germany
As long as the recipient lives in Germany, waiting usually provides no German gift tax advantage
The position is particularly clear where parents move to Switzerland but their children continue living in Germany.
German inheritance and gift tax law takes account of the recipient’s circumstances as well as those of the donor.
If the child is resident in Germany when the gift is completed, unlimited tax liability generally applies even if the parents have lived exclusively in Switzerland for many years.
Parents move to Switzerland
Moving abroad may change the parents’ personal tax liability.
Child remains in Germany
The child’s German residence generally remains sufficient to establish unlimited gift tax liability.
Moving alone does not remove the tax
Simply waiting until after the parents have moved therefore does not eliminate German gift tax.
Swiss perspective
Making a gift only after arrival may also trigger Swiss gift tax
Switzerland does not levy a general federal gift tax. Gift taxation is generally governed by cantonal law.
For gifts of movable assets, Swiss tax liability generally depends on the canton where the donor resides.
If the gift is made before moving to Switzerland, the future canton of residence will generally not yet have jurisdiction over an ordinary gift of movable assets based on the donor’s residence.
If the gift is made only after the move, the law of the specific Swiss canton must also be examined.
For children, additional Swiss tax is often low or zero — but an assessment is still needed
Direct descendants are exempt from gift tax in many Swiss cantons. However, the outcome may be significantly different for siblings, unmarried partners, more distant relatives or unrelated recipients.
Special rules apply to real estate
For real estate, the donor’s residence is not the only relevant factor. Property-related taxes typically depend on where the property is located. Real estate transfers therefore require a separate assessment.
Timing
Make the gift before or after moving abroad?
| Situation | Germany | Switzerland | Planning implications |
|---|---|---|---|
| Gift before departure; donor and child live in Germany | Unlimited German gift tax liability | For movable assets, generally no tax solely because of the subsequent move to Switzerland | An ordinary German gift tax situation |
| Gift after departure; child remains in Germany | Unlimited tax liability continues because of the child’s residence | Assess gift tax in the new canton of residence | Waiting generally does not eliminate German tax |
| Gift shortly after departure; both parties live outside Germany; donor is a German national | The five-year rule may continue to trigger unlimited tax liability | Assess Swiss cantonal tax | Moving abroad alone is generally insufficient |
| Gift after more than five years; neither party is still treated as a German resident | Generally assess only limited tax liability for German domestic assets | Swiss cantonal tax may be decisive | Only at this stage may the personal scope of German tax liability fundamentally change |
| Recipient also moves to Switzerland | Assess continuing German tax obligations and the five-year rule for both parties | Assess cantonal gift tax law | Comprehensive planning is possible, but residence alone is not decisive |
German tax allowances
Moving abroad does not automatically change the personal allowances
Where unlimited German gift tax liability applies, the personal allowances under Section 16 ErbStG generally apply.
| Recipient | Personal allowance |
|---|---|
| Spouse or registered civil partner | EUR 500,000 |
| Child | EUR 400,000 |
| Grandchild whose relevant parent is still alive | EUR 200,000 |
| Grandchild whose relevant parent has predeceased | Generally EUR 400,000 |
| Other persons in tax class I | EUR 100,000 |
| Tax class II | EUR 20,000 |
| Tax class III | EUR 20,000 |
For larger estates, using allowances over several periods is often more important than the move itself
If assets are to be transferred to the next generation in any event, making timely use of the first ten-year period may be considerably more important than whether the gift takes place a few months before or after the move.
Section 14 ErbStG
Earlier gifts remain relevant after moving abroad
Multiple transfers of assets from the same person to the same recipient within ten years are generally aggregated for German tax purposes.
Moving to Switzerland does not reset this ten-year period.
For example, someone who gave EUR 300,000 to a child three years before departure and transfers a further EUR 300,000 after the move cannot claim a fresh personal allowance merely because their residence has changed.
Five years and ten years are two different periods
The five-year rule in Section 2 ErbStG concerns the personal tax liability of German nationals after moving abroad. The ten-year rule in Section 14 ErbStG concerns the aggregation of multiple acquisitions from the same person.
Asset type
The optimal timing may differ depending on the asset
Cash & bank deposits
Relatively straightforward to value for tax purposes. The key factors are personal tax liability, allowances and Swiss cantonal rules.
Securities portfolio
For listed securities, the quoted market value when the gift is completed is particularly relevant.
Company shares
Valuation, Sections 13a and 13b ErbStG and potential exit taxation under Section 6 AStG may also be relevant.
Real estate
In addition to gift tax, property location rules, land registration, property taxes and other local charges may be relevant.
Swiss shareholdings
From a German perspective, valuation and potential restrictions on business asset relief must be examined.
Receivables & loans
Receivables can also be gifted. Their value, enforceability and terms must be documented.
Businesses
For GmbH shares, gift planning and exit taxation must be considered together
If the person moving abroad holds substantial interests in corporations, making a gift before departure is not merely a gift tax question.
The move itself may also trigger taxation under Section 6 AStG if the statutory requirements for a shareholding within Section 17 of the German Income Tax Act (EStG) are met.
Transferring the shareholding before departure changes its ownership and may therefore affect subsequent exit taxation. At the same time, the transfer itself may trigger gift tax.
Assess more than the potential gift tax saving
For company shares, the analysis must at least model gift tax, business valuation, potential business asset relief, income tax consequences and exit taxation together.
Example 1
Parents move to Switzerland — child remains in Germany
A father who is a German national lives in Germany and plans to move permanently to Switzerland. His adult child remains in Germany. The father wishes to make a gift of EUR 600,000.
Before departure
Both father and child qualify as German residents. The gift generally falls within unlimited tax liability.
After departure
The child remains a German resident. This alone means that unlimited German tax liability continues.
Switzerland
After the move, gift tax in the Swiss canton of residence must also be examined.
Outcome
Simply postponing the gift until after the move generally provides no German gift tax advantage in this case.
Example 2
Both parent and child live outside Germany after the move
A German national moves from Germany to Switzerland and completely gives up their German residence. Their adult child also lives outside Germany.
A gift made immediately after departure is nevertheless not automatically outside the scope of unlimited German gift tax liability.
Because of the five-year rule, the German donor may continue to be treated as a German resident for ErbStG purposes. The personal scope of tax liability may fundamentally change only after the statutory period of continued liability has expired.
Even then, limited German tax liability must still be assessed for certain German domestic assets.
Foreign tax
Exposure to both German and Swiss gift tax requires a separate assessment
The separate Germany–Switzerland inheritance tax treaty generally does not apply to ordinary lifetime gifts.
If Swiss cantonal gift tax actually arises after the move and the same acquisition is also subject to German gift tax, a foreign tax credit under Section 21 ErbStG may need to be considered.
In particular, the foreign tax must have been assessed and paid, the relevant assets must also be subject to German tax, and the other statutory requirements must be met.
A tax credit does not replace advance planning of where to live
Differences in cantonal exemptions and tax rates may mean that the Swiss canton of residence affects the overall tax burden on a subsequent gift. This should be examined before a substantial transfer of assets.
Section 30 ErbStG
A gift made around the time of departure generally has to be notified in Germany
An acquisition subject to gift tax must generally be notified to the competent German tax office within three months of becoming aware of the acquisition.
For a lifetime gift, both the recipient and the donor generally have a notification obligation.
This also applies, in particular, to foreign assets or where the donor has meanwhile moved to Switzerland.
Moving abroad does not retrospectively end existing German compliance obligations
A gift completed before departure remains a German tax matter. A subsequent change of residence generally does not alter the gift tax liability that has already arisen.
Planning
Coordinate the gift and the move in eight steps
People involved
Establish the residence and nationality of the donor and recipient.
Departure
Determine when German residence actually ends.
Section 2 ErbStG
Compare personal tax liability before and after departure.
Earlier acquisitions
Determine the ten-year period and the remaining allowances.
Assets
Distinguish between cash, securities, real estate and shareholdings.
Switzerland
Assess gift tax in the intended canton of residence.
Total tax
Compare the scenarios before and after departure, including any tax credits.
Implementation
Coordinate the agreement, transfer, valuation and notifications.
Frequently asked questions
Making a gift before moving to Switzerland
Is a gift made before moving to Switzerland taxable in Germany?
Will I save German gift tax by making the gift after the move?
What if my child remains in Germany?
How long is a German national still treated as a German resident after moving abroad?
Is this the same five-year rule as under exit taxation?
What happens after the five-year period has expired?
Will I have to pay Swiss gift tax after the move?
Are gifts to children tax-free in Switzerland?
Can it make sense to make the gift before moving?
Can it make sense to wait until after the move?
Does moving abroad give me a fresh tax allowance?
What is the German tax allowance for a child?
What should be considered for GmbH shares before departure?
Does the Germany–Switzerland inheritance tax treaty apply to an ordinary gift?
Can Swiss gift tax be credited against German gift tax?
Does the gift have to be notified to the German tax office?
Further tax insights
Gifts, relocation & wealth succession
Germany–Switzerland tax advice
Planning to move to Switzerland and transfer assets beforehand?
We compare gifts before and after departure, assess personal German gift tax liability, the five-year rule for German nationals, allowances and earlier acquisitions, and Swiss cantonal gift tax. For company shares, we also examine the interaction with exit taxation.
Arrange an initial consultation