Germany–Switzerland · Inheritance tax
Swiss estate · German-resident beneficiaryInheritance from Switzerland for German residents
If you live in Germany and inherit assets from a Swiss estate, German inheritance tax may initially apply to your entire inheritance. However, the Germany–Switzerland estate and inheritance tax treaty limits Germany’s taxing rights. Key provisions include the exception where both the deceased and the beneficiary are Swiss nationals, and the exemption for certain Swiss real estate. The outcome depends on the deceased’s treaty residence, the beneficiary’s residential circumstances, both individuals’ nationalities and the type of assets inherited.
Starting point
Deceased resident in Switzerland – beneficiary resident in Germany
A typical cross-border inheritance arises where the deceased last lived in Switzerland while a child, spouse or other beneficiary already lives in Germany.
Under German inheritance tax law, the beneficiary’s status as a domestic taxpayer can in itself trigger unlimited German inheritance tax liability, covering the entire inheritance.
Swiss bank balances, securities, company interests and other assets may therefore initially fall within the German tax base. The next step is to determine whether the inheritance tax treaty restricts Germany’s taxing rights or provides an exemption.
The treaty is therefore relevant even where no Swiss inheritance tax is payable because of a cantonal exemption. The analysis is not limited to claiming a credit for Swiss tax.
Section 2 ErbStG
The beneficiary’s German residence can bring the entire inheritance within scope
Under section 2(1), no. 1 of the German Inheritance and Gift Tax Act (ErbStG), unlimited German inheritance tax liability arises if either the deceased or the beneficiary is a domestic taxpayer at the relevant time.
An individual is generally treated as a domestic taxpayer if they have a residence or habitual abode in Germany.
If the beneficiary lives in Germany, the entire inheritance may therefore fall within scope, even if the deceased lived in Switzerland and most of the assets are located there.
Domestic tax liability is only the starting point. Whether Germany may actually tax all the assets also depends on the limitations and relief provisions of the inheritance tax treaty.
- beneficiary with a German residence
- generally unlimited inheritance tax liability
- the entire inheritance as the starting point
- foreign bank accounts and securities included
- treaty exceptions and exemptions must also be checked
Swiss inheritance tax
Swiss inheritance tax is generally levied at cantonal level
Switzerland has no general federal inheritance tax. Inheritance taxes are generally levied by the cantons, sometimes with municipal involvement.
The Swiss tax burden therefore depends substantially on the canton concerned, the beneficiary’s relationship to the deceased and the assets transferred.
Spouses and direct descendants are fully or largely exempt from inheritance tax in many cantons. Siblings, unrelated individuals and other beneficiaries may face substantial cantonal tax.
No uniform Swiss tax scale
Tax liability, allowances and rates differ between cantons.
The relationship matters
Spouses and descendants often receive favourable treatment; more distant relatives and unrelated beneficiaries generally receive less relief.
Check the asset category
Real estate and business assets can raise specific cantonal and treaty issues.
A separate inheritance tax treaty
Germany and Switzerland have a dedicated treaty for inheritances
In addition to their income and wealth tax treaty, Germany and Switzerland have a separate agreement for the avoidance of double taxation in respect of estate and inheritance taxes.
This agreement applies to estates of individuals who, at the date of death, were resident in Germany, Switzerland or both states for the purposes of the agreement.
Where the deceased had a residence in both states, treaty residence is determined using specific tie-breaker rules: permanent home, centre of vital interests, habitual abode and, where relevant, nationality.
Distinguish the inheritance tax treaty from the income tax treaty
The separate estate and inheritance tax treaty governs inheritance cases. The general income and wealth tax treaty does not determine how double inheritance taxation is relieved.
Article 8(2) of the inheritance tax treaty
A beneficiary in Germany: an additional taxing right with exceptions
If the deceased was resident in Switzerland for treaty purposes at the date of death, Article 8(2) generally still allows Germany to tax the inheritance under German law if the beneficiary had a permanent home or habitual abode in Germany at that time.
Article 4(5) applies correspondingly to the permanent-home requirement: accommodation used for recreation, therapeutic stays, study or sport does not qualify if it is demonstrably used only occasionally. A residence under German domestic law and a permanent home under the treaty must therefore be assessed separately.
Exception: both the deceased and the beneficiary are Swiss nationals
If both individuals were Swiss nationals at the date of death, the additional German taxing right under Article 8(2) does not apply. The beneficiary’s German residence alone does not then justify comprehensive German taxation under that provision.
This does not automatically exempt every estate asset from German tax. Other taxing rights, such as those over German real estate under Article 5, and any applicable special rules in Article 4(3) and (4), must still be considered separately.
Article 4(3) and (4) address certain cases involving a deceased person’s longstanding permanent home in Germany or an earlier departure from Germany. These provisions have their own conditions and exceptions; the Article 8(2) exception does not replace that analysis.
Exemption and tax credit relief form part of the analysis
Where Germany may tax under Article 8(2), Switzerland retains any taxing rights permitted by the treaty. The third sentence of Article 8(2) expressly refers to Article 10(1) for relief. Depending on the assets and the deceased’s nationality, relief may take the form of an exemption or a limited tax credit.
Immovable property
Swiss real estate: exemption where the deceased was a Swiss national
For real estate, the property’s location is the starting point. Swiss real estate may be taxed under the applicable Swiss rules; Article 5 of the treaty recognises the taxing right of the state where immovable property is situated.
If Germany taxes the inheritance under Article 8(2), Article 10(1) applies correspondingly. Under that provision, immovable property situated in Switzerland within the meaning of Article 5(2) is exempt from German tax if the deceased was a Swiss national at the date of death.
The exemption is subject to progression: the value of the exempt property may increase the tax rate applied to the remaining inheritance taxable in Germany. The Swiss property itself is not thereby taxed in Germany.
The real estate exemption depends on the deceased’s nationality
The beneficiary does not need to be a Swiss national for this exemption. Nor does the exemption require Swiss inheritance tax actually to have been paid on the property. If both individuals were Swiss nationals, however, the exception to Germany’s additional taxing right under Article 8(2) must be considered first.
If the deceased was not a Swiss national, this particular real estate exemption does not apply. Where Germany taxes under Article 8(2), the tax credit rules may then be relevant. Shares in a company that owns Swiss real estate cannot automatically be treated in the same way as directly inherited real estate.
| Asset type | Typical treaty treatment | German tax review |
|---|---|---|
| Swiss real estate | Swiss taxation under local rules; immovable property under Article 5(2) | Where Article 10(1) applies: exemption with progression if the deceased was Swiss; otherwise a tax credit may be available |
| German real estate | German taxing right under Article 5 | Check the taxing right even if both individuals were Swiss nationals; consider German valuation rules and reliefs |
| Private bank account | Generally allocated to the deceased’s state of treaty residence under Article 8(1) | Check Germany’s additional taxing right under Article 8(2), including the nationality exception; consider Article 4(3) and (4) |
| Private securities portfolio | Usually Article 8; individual assets may require separate classification | Check residential circumstances and nationalities; do not automatically apply the rules for Swiss real estate |
| Business assets | Article 6 or other relevant provisions | Distinguish permanent-establishment assets from corporate shareholdings; review Article 8(2) and German reliefs separately |
Business assets
Swiss businesses and company interests require separate classification
For business-related assets, it is essential to determine whether the inheritance comprises permanent-establishment assets, shares in a corporation or other assets.
Article 6 of the inheritance tax treaty contains specific rules for permanent-establishment assets. These assets may generally be taxed in the state where the permanent establishment is located.
A shareholding in a Swiss AG or GmbH is not automatically a permanent-establishment asset. Company interests therefore require their own classification under the treaty.
On the German side, the next step is to determine whether, and to what extent, German inheritance tax relief for business assets or qualifying shareholdings is available.
Treaty allocation and German domestic exemptions are separate questions
The treaty determines which state may tax an asset. Whether Germany subsequently grants business property relief is a matter of German inheritance tax law.
Relief from double taxation
Check exemptions first, then any available tax credit
Where the deceased was resident in Switzerland for treaty purposes and the beneficiary lives in Germany, both states may be entitled to tax the same inheritance. For German taxation under Article 8(2), the treaty refers to the relief provisions in Article 10(1).
Germany’s taxing right
First establish which assets Germany may tax under the treaty. The exception for two Swiss nationals may exclude the additional right under Article 8(2).
Exemption
Swiss immovable property inherited from a Swiss national is exempt in Germany where Article 10(1)(a) applies. The property may still affect the rate on the remaining taxable inheritance.
Tax credit
Where the exemption does not apply, Swiss inheritance tax permitted by the treaty and actually paid is credited under Article 10(1)(b), subject to the applicable limits.
The credit cannot exceed the portion of German tax attributable to the assets that Switzerland may tax under the treaty. The corresponding German credit rules also apply: section 21(4) ErbStG refers to section 21(1)–(3). The assessment, payment and allocation of the Swiss tax must be documented.
A Swiss tax exemption does not automatically eliminate German tax
If the relevant canton charges no inheritance tax on a child’s inheritance, for example, there is no Swiss tax to credit in that respect. German tax may nevertheless remain payable where the treaty allows Germany to tax. Any independent treaty exemption must still be taken into account.
German tax-free allowances
The standard German personal allowances generally apply under unlimited tax liability
If the beneficiary living in Germany is subject to unlimited German inheritance tax liability, the personal allowances under section 16 ErbStG generally apply.
| Beneficiary | Personal allowance |
|---|---|
| Spouse / registered civil partner | EUR 500,000 |
| Child | EUR 400,000 |
| Grandchild whose parent is still alive | EUR 200,000 |
| Grandchild whose parent (the deceased’s child) has already died | Generally EUR 400,000 |
| Other beneficiaries in tax class I | EUR 100,000 |
| Tax class II | EUR 20,000 |
| Tax class III | EUR 20,000 |
Spouses and children may qualify for additional relief
In addition to the personal allowance, special survivor’s allowances and, subject to the statutory conditions, asset-specific exemptions such as family-home or business property relief may need to be considered.
Example
Father in Switzerland – child in Germany: three different outcomes
The father was resident exclusively in Switzerland for treaty purposes. His adult child lives permanently in Germany and has a permanent home there. The estate consists solely of private bank balances, an ordinary securities portfolio and directly held Swiss real estate. For this example, there are no other German connecting factors and the special rules in Article 4(3) and (4) do not apply.
Father and child are German nationals only
Article 8(2) generally allows Germany to tax the entire inheritance. The special real estate exemption for deceased Swiss nationals does not apply. Swiss inheritance tax actually paid and permitted by the treaty may be credited within the applicable limits.
Father is Swiss only; child is German only
Germany may tax the bank balances and portfolio under Article 8(2). The Swiss real estate is exempt under the third sentence of Article 8(2), read together with Article 10(1)(a), but may increase the tax rate on the remaining inheritance.
Father and child are Swiss nationals only
Germany’s additional taxing right under Article 8(2) is excluded. On the stated assumptions, the Swiss assets are not subject to German inheritance tax despite the child’s German residence. Cantonal taxation must be considered separately.
Document nationalities at the date of death
These examples illustrate the allocation of taxing rights, not a specific tax calculation. The actual tax burden also depends on asset values, debts, allowances, previous transfers and the relevant Swiss canton.
German notification requirements
Foreign inheritances generally need to be notified to the German tax office
Under section 30 ErbStG, an acquisition subject to German inheritance tax generally must be notified to the competent German inheritance tax office within three months after the beneficiary becomes aware of it.
Where foreign assets are involved, beneficiaries should not assume that a Swiss authority, Swiss notary or foreign estate administration process replaces the German notification.
The notification includes information about the deceased and the beneficiary, the date of death, the legal basis of the acquisition, asset values, the family relationship and previous transfers.
A notification is not necessarily the inheritance tax return
The initial obligation is generally the statutory notification. The tax office may subsequently request a formal inheritance tax return and set a separate filing deadline.
Documentation
Which documents are needed for an inheritance from Switzerland?
| Document | Purpose |
|---|---|
| Certificate of inheritance, Swiss heirship certificate or will | Establish the legal basis and entitlement to the estate |
| Death certificate | Document the date of death and the relevant tax date |
| Evidence of the deceased’s residence | Determine treaty residence and, where relevant, previous permanent homes in Germany and the departure date |
| Evidence of the beneficiary’s residence | Assess German tax liability and the permanent home or habitual abode at the date of death |
| Evidence of both individuals’ nationalities | Establish all nationalities held at the date of death for Article 8(2) and Article 10(1)(a) |
| Estate inventory | Identify all assets and liabilities |
| Bank and investment account records | Document values at the date of death |
| Real estate documents | Review property location and valuation |
| Business records | Classify company interests and business assets |
| Swiss tax assessment and proof of payment | Document the assessment, payment and allocation of Swiss tax eligible for credit |
| Previous gifts | Review Germany’s ten-year aggregation rules |
Review process
A Swiss inheritance for a German resident: eight steps
Deceased
Establish treaty residence, nationalities and any previous permanent homes in Germany.
Beneficiary
Review personal tax liability, permanent home or habitual abode, and nationalities.
Estate
Prepare a complete inventory of assets and liabilities.
Taxing rights
Apply Articles 4–8, including the exception where both individuals are Swiss nationals.
Switzerland
Determine cantonal tax liability, exemptions and any inheritance tax paid.
Germany
Consider treaty exemption, progression, valuation, allowances and reliefs.
Tax credit
Credit any remaining eligible Swiss tax under the treaty and the corresponding German rules.
Compliance
Check notification obligations and submit required notifications and tax returns.
Frequently asked questions
Inheritance from Switzerland for German residents
Do I have to pay German inheritance tax if the deceased lived in Switzerland?
Is there an inheritance tax treaty between Germany and Switzerland?
Can Germany tax the inheritance even though the deceased was resident in Switzerland?
Is Swiss real estate subject to German inheritance tax?
Does Germany tax an inherited Swiss bank account?
Does Germany tax an inherited Swiss securities portfolio?
Does Switzerland have a national inheritance tax?
Are children exempt from inheritance tax in Switzerland?
What is the German tax-free allowance for a child?
What is the allowance for a spouse?
Can Swiss inheritance tax be credited against German tax?
Can the Swiss tax credit exceed the German tax due?
Must I notify the German tax office of an inheritance from Switzerland?
Is the notification already a full inheritance tax return?
Which values are used for Swiss assets?
What needs to be considered for an interest in a Swiss company?
Are Swiss beneficiaries living in Germany generally exempt from German inheritance tax?
Must the beneficiary be Swiss to qualify for the Swiss real estate exemption?
Does the real estate exemption apply even if no Swiss inheritance tax is payable?
What does exemption with progression mean for inheritance tax?
Further tax insights
More on Germany–Switzerland tax matters
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