St. Gallen Inheritance Tax Planning
Last updated: 14 Nov 2025
St. Gallen Inheritance Tax — Planning Guide
How to reduce or avoid inheritance tax in the Canton of St. Gallen (Erbschaftssteuer): optimise exemptions and rate classes, structure gifts, plan for real-estate and business assets, coordinate cross-border issues, and secure liquidity for heirs.
Service notice: Swiss inheritance tax services are delivered by Sesch TaxRep GmbH, Buchs SG (Switzerland).
Planning Basics & Objectives
Goal
Reduce the taxable base and/or rate applied to each beneficiary’s share, while avoiding double taxation and ensuring smooth administration.
Key drivers
Relationship to the decedent (rate class), asset location (situs), and timing of transfers (lifetime vs. death).
Who benefits
Spouses/descendants often receive favourable treatment; distant relatives and unrelated beneficiaries face higher burdens.
Exemptions & Beneficiary Classes
Optimise the recipient mix
- Structuring Favour transfers to spouse/descendants where the law provides lower rates or exemptions.
- Splitting Distribute assets across favoured beneficiaries to keep individual brackets low.
- Documentation Keep civil-status proof ready (marriage/birth certificates; translations if required).
Bequests to charities
- Consider qualifying charitable legacies to reduce the taxable base.
- Use separate legacies for foreign charities and verify eligibility under St. Gallen rules.
Pre-Death Gifts & Timing
Lifetime gifts (Donationen) can shift assets toward favoured beneficiaries and outside future growth. Watch for:
- Look-back Gifts close to death may be aggregated or challenged by the tax authority.
- Valuation Fix value at gift date; keep supporting appraisal and document date of transfer.
- Cash vs. real-estate For SG real estate, evaluate sale vs. gift vs. holding strategy carefully.
- Cross-border Check foreign gift/inheritance systems to secure credits and avoid timing mismatches.
Real-estate Strategy (St. Gallen-Situs)
Before death
- Consider selling or restructuring SG property (e.g., bare ownership/usufruct, living-use concessions).
- Monitor municipal valuations and market comparables; plan appraisal timing.
- Ensure mortgage/debt allocation is linked to SG property to support deductions.
At/after death
- Use a date-of-death appraisal and capture debt balances as of that date.
- Coordinate with nonresident rules if decedent or heirs live outside Switzerland.
- Ensure land-register extraction and tax clearance ahead of property transfer to avoid delays.
Business & Shareholdings
- Functional allocation Assets tied to a SG permanent establishment may be subject to SG tax – build asset-ledgers and allocate accordingly.
- Succession Use shareholder agreements, buy-sell clauses and pre-arranged valuations.
- Discounts Consider valuation discounts for minority or illiquid stakes (supported by independent expert opinion).
- Cash planning Pre-fund buy-outs (life insurance, sinking funds) to avoid forced liquidation by heirs/tax-office.
Cross-Border Coordination
Synchronise Swiss SG treatment with foreign estate/inheritance rules to avoid double taxation:
- Match valuation date, currency conversions and debt allocations across jurisdictions.
- Gather foreign tax assessments and payment evidence to support credit claims in SG.
- Ensure consistency of appraisals and asset disclosures between Swiss and foreign filings.
Always confirm current practice via our Forms & Deadlines page or with the SG tax authority.
Liquidity & Funding
Avoiding forced sales
- Set aside cash/liquid assets to cover expected SG tax before property transfers.
- Use life insurance with beneficiary aligned to funding needs (tax payment vs. asset transfer).
- Stagger distributions in the will and match them to likely assessment timing.
Installments & extensions
- Request extension early when valuations or foreign clearances are pending.
- Negotiate tax-office payment plans to reduce interest exposure.
Documentation & Valuation
- Succession documentation: death certificate, will, succession certificate (Erbbescheinigung).
- Appraisal at date of death for property and closely held assets; support with comparables.
- Debt schedule allocable to SG-situs assets (mortgages, liens) as of death.
- Proof of beneficiary relationship (civil-status records, translations if necessary).
- Foreign estate/inheritance filings and payment proof where relief is claimed.
Ready to estimate? Use the St. Gallen Calculator.
Action Plan & Workflow
1
Scope estate. Identify assets, beneficiaries and assess SG-situs exposure, heir relationships, likely exemptions.
2
Valuation. Commission date-of-death/appraisal valuations; align with foreign-filing requirements.
3
Structuring. Explore gifts, charitable legacies, usufruct/bare-ownership splits, shareholder agreements where relevant.
4
Liquidity. Identify tax funding gap; size and secure funding via life insurance or earmarked assets.
5
Compliance. Prepare SG filings, refer to Forms & Deadlines; request extensions if valuations/foreign clearances pending.
6
Review regularly. Revisit your plan annually and after major life events, asset changes or law updates.
Need a tailored plan?
We build fixed-fee plans for St. Gallen estates, from simple property transfers to complex cross-border estates.
Talk to an advisor — Fixed-fee packages Contact
This page provides general planning ideas and is not legal or tax advice. Confirm current St. Gallen practice with the authority and check inter-cantonal/cross-border interactions before implementation.