Last updated: 15 Nov 2025

Germany–Switzerland Cross-Border Inheritance Tax – Planning

Actionable planning for cross-border estates between Germany and Switzerland: use allowances and the 10-year rule, place assets efficiently by situs, structure lifetime gifts, leverage family-home and business-asset reliefs, manage cantonal inheritance and gift taxes, plan liquidity, and optimize across multiple heirs—while coordinating treaty rules and § 21 ErbStG credits.

1) Scope, residency & situs (high level)

• Germany (ErbStG): worldwide taxation if decedent or heir is German-resident; otherwise German-situs assets only.
• Switzerland: currently no federal inheritance tax; inheritance and gift taxes are levied at cantonal/communal level, typically based on the decedent’s domicile and the situs of immovable property.
• Cross-border relief: apply the Germany–Switzerland inheritance tax treaty where applicable and use § 21 ErbStG to credit Swiss cantonal/communal inheritance taxes on foreign-asset slices.

See: Treaty · Coordination & §21

2) Allowances & the 10-year rule

• German personal allowances per recipient (e.g. spouse €500k, child €400k, grandchild €200k, others €20k) reduce the taxable base.
• For lifetime gifts, German allowances reset every 10 years per donor–donee pair (use staging to multiply relief).
• Swiss cantons often grant generous exemptions for spouses (frequently fully exempt) and, in many cantons, reduced rates or exemptions for descendants; distant heirs and non-relatives can face high marginal rates.
• Model allowance usage per person on the German side and review the relevant canton’s regime to avoid adverse combinations.

Try scenarios with the German inheritance tax calculator and consult the Swiss canton overview from the hub.

3) Lifetime gifts (timing & stacking)

• Use multi-step gifting (e.g., spouse → children) and time windows on the German side to recycle allowances every 10 years.
• Track aggregation for German law (prior gifts within 10 years affect brackets and residual allowance).
• Check the relevant Swiss canton’s treatment of gifts (gift tax vs. inheritance tax only) and whether inter vivos transfers are preferable to inheritances.
• Coordinate gift timing so that valuation dates, exchange rates and treaty positions are consistent when later computing §21 credits.

4) Family home exemption (spouse/children)

• Germany – spouse/partner: largely tax-free acquisition of the owner-occupied family home if self-use continues for a minimum period (approx. 10 years).
• Germany – children: tax-free up to around 200 m² of living space if self-use continues; excess area proportionally taxable.
• Switzerland: inheritance tax treatment depends on the canton; many grant favourable rates or exemptions for spouse/children, but details vary and must be checked canton by canton.
• Plan occupancy, valuation, and fallback rules; watch for clawback on early sale or ceased self-use on the German side and any recapture or conditions imposed by the Swiss canton.

Related: Real estate & business assets

5) Business relief (§§13a/13b ErbStG)

• Germany: 85% (regular) or 100% (option) exemption for qualifying business assets / shareholdings; retention periods (≈5/7 years) and wage-sum tests apply.
• Monitor passive assets, cash thresholds and restructuring effects that can disqualify or reduce relief.
• For Swiss-domiciled businesses or participations, review both German classification (for ErbStG and treaty/§21 purposes) and the canton’s treatment of business transfers.
• Align valuation (BewG vs. Swiss practice / market value) and keep coherent documentation to support both sides.

6) Liquidity planning & cantonal exposure

• Estimate potential German inheritance tax and Swiss cantonal inheritance/gift taxes early; identify which heirs will need liquidity and in which jurisdiction.
• Use cash reserves, life insurance or credit facilities earmarked for tax payments to avoid forced sales of German or Swiss property or business assets.
• Synchronize German and Swiss filing deadlines so that § 21 ErbStG credits can be claimed efficiently once Swiss tax is assessed and paid.
• Where possible, structure instalments or staged transfers so that tax-triggering events match liquidity events (e.g. dividends, real estate refinancing).

See also: Coordination & §21 credits

7) Multi-heir optimization

• Allocate assets to beneficiaries with higher allowances / lower rates in Germany and more favourable treatment in the relevant Swiss canton.
• Combine heirship shares and legacies to steer which assets (German vs. Swiss) end up with which heirs and in which tax brackets.
• Consider appointing an executor with clear powers to adjust distributions for tax efficiency, cash needs and §21 documentation after death.
• Coordinate with forced heirship or Pflichtteil rules on the German side and any mandatory shares or family protections applicable under Swiss law.

8) Asset location & debt allocation

• Place assets mindful of situs rules in both countries to reduce double exposure and maximize treaty/§21 relief (e.g. German vs. Swiss real estate, bank accounts, portfolio assets).
• Match debt to assets where deductible and respected in both systems; document purpose, security and currency to support deductions.
• For property and company shares, align valuation basis (BewG in Germany vs. Swiss valuation practice) and maintain consistent independent appraisal evidence.
• Be careful with holding companies or intermediate structures that can shift situs for treaty purposes in unintended ways.

Deep dive: Real estate & business

9) Trusts, foundations & structuring

• Foreign trusts and Treuhand structures require careful classification under both German and Swiss tax law to avoid unintended periodic or transfer taxation.
• Private foundations (Stiftungen) and similar vehicles can centralize governance and reduce cross-border friction if properly designed and aligned with treaty concepts.
• Define beneficiary rights (fixed vs. discretionary), distribution policies and control rights early so that both countries’ inheritance tax rules can be mapped.
• Coordinate legal, tax and administration: foundation structuring/management, bank onboarding, reporting and ongoing compliance in Germany and Switzerland.

Read more: Trusts & Foundations (cross-border).

Next steps

Related resources: Treaty (Germany–Switzerland) · Real estate & business · Executor & administration · FAQ