Swiss Inheritance Tax

Switzerland-South Korea Cross Border Inheritance Tax Guide Switzerland-South Korea Cross Border Inheritance Tax Guide

Switzerland-South Korea Cross Border Inheritance Tax Guide

Switzerland × South Korea: Cross-Border Inheritance & Gift Tax — No IHT Treaty, Cantonal (CH) & National IHT (KR)

Last updated: 3 Oct 2025

Switzerland × South Korea: Inheritance & Gift Tax — No IHT Treaty

Switzerland and South Korea have no bilateral inheritance/gift tax treaty. Double-tax mitigation therefore depends on Swiss cantonal rules (no Swiss federal IHT; spouses and children often exempt) and Korea’s national Inheritance & Gift Tax Act (progressive rates up to 50%, effectively 60% for certain controlling shareholdings; basic deduction KRW 200 million). Korea has announced a recipient-based reform targeted for 2028 (subject to parliamentary approval).

Switzerland: Inheritance tax basics (official) Korea: Inheritance & Gift Tax Act (EN) Swiss estate-tax treaties (no KR) KR reform (Reuters)

Swiss inheritance/gift taxation is cantonal; spouses and descendants are commonly exempt. KR law provides a KRW 200m basic deduction and high rates; court/practice confirm up to 60% on controlling shareholdings. No CH–KR IHT treaty is listed among Switzerland’s estate-tax conventions.

Contents

At a glance

No CH–KR IHT treaty

  • Relief relies on domestic rules: Swiss cantonal practice and KR national IHT provisions.
  • Swiss income-tax DTAs don’t govern inheritance/gift taxes.

Why it matters

  • KR’s high rates (to 50–60%) can collide with CH exposure depending on canton/exemptions.
  • Clean situs classification and documentation drive any relief outcome.

What taxes can bite?

CountryTax & triggerScope highlights
Switzerland Cantonal inheritance/gift taxes No federal IHT; spouses generally exempt; many cantons broadly exempt children. Canton & commune rules vary.
South Korea National Inheritance & Gift Tax Progressive up to 50% (effectively 60% for certain controlling shareholdings). KRW 200m basic deduction; additional deductions/credits per law.

Relief in practice (no treaty)

  • Switzerland: Whether and how relief applies is determined at the cantonal level. In many cantons, transfers to spouses/children are fully exempt → often no Swiss IHT arises to credit.
  • South Korea: National IHT applies per statute; without a treaty, relief is limited to KR domestic mechanics. Robust evidence (situs, valuations, assessments, payment proofs) is critical.
Documentation matters: asset valuations at death, situs evidence (e.g., bank domicile, share register), certified assessments, proof of payment, and sworn translations where needed.

Situs drivers (high level)

AssetSitus (typical)Comments
Immovable propertyWhere locatedPrimary taxing right usually at situs.
Tangible movablesPhysical location at death/transferInventory/location proofs on the key date.
Bank claims / depositsDebtor location (bank)Maintain statements and bank domicile evidence.
Shares / stockPlace of incorporationSwiss AG/GmbH → CH-situs; Korean 주식회사/Co., Ltd. → KR-situs.

Korea: rates & deductions (quick facts)

ItemRuleSource
Top rate 50% (effectively up to 60% for certain controlling shareholdings) Courts/news coverage.
Basic inheritance deduction KRW 200,000,000 (resident/non-resident decedent) Statute (EN).
System reform Planned switch to recipient-based model (target 2028, subject to Assembly) Reuters/Korea Herald.

Worked example (illustrative)

Scenario
  • Decedent: Swiss resident (Canton Zurich).
  • Heir: Adult child resident in Seoul.
  • Assets:
    • KR-situs listed shares: KRW 1.2 billion
    • Swiss bank portfolio (Zurich): CHF 600,000
  • Assumptions (illustrative only): Zurich exempts children from inheritance tax; ignore debts/other reliefs; FX rounded.
Step A — Switzerland (Zurich canton)
Child heir typically exempt → no Swiss inheritance tax due.

Step B — Korea (IHT)
KR taxes the KR-situs shares; apply KRW 200m basic deduction, then progressive rates (illustrative); no KR tax on Swiss-situs bank assets.

Step C — Double-tax outcome
With no Swiss tax on the child and no treaty, there is typically no foreign tax credit to offset KR IHT. The KR liability remains on the KR-situs assets.

This is simplified and for education only. Actual results depend on the canton, deductions (KR), valuations, FX and timely filings in both countries.

Planning checklist (no legal/tax advice)

  • Identify canton and confirm exemptions (spouse/children) early.
  • Map assets by situs (CH vs. KR); pay special attention to controlling shareholdings in KR.
  • Quantify KR liability (basic deduction + brackets) and test lifetime gifts vs. bequest.
  • Paper the file: valuations at death, situs proof, assessments, payment confirmations, translations.
  • Reform watch: if the KR recipient-based model starts in 2028, re-model exposures beforehand.
Disclaimer: General information, not advice. Outcomes depend on facts and current law across Swiss cantons and the Republic of Korea.

FAQ

Is there a Switzerland–Korea inheritance/gift tax treaty?

No. Switzerland lists estate/inheritance tax conventions with several countries (e.g., US, UK, Germany) — Korea is not listed. Swiss income-tax DTAs do not govern IHT/Gift.

Do Swiss cantons always tax inheritances?

No. Spouses are generally exempt, and many cantons broadly exempt children. Always check the relevant canton.

How high can Korean inheritance tax go and what’s the basic deduction?

Top rate is 50% (effectively up to 60% for certain controlling shareholdings). The statutory basic inheritance deduction is KRW 200 million.

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