In Appenzell IR, wealth tax is charged on the taxpayer’s net wealth (Reinvermögen): total worldwide assets minus deductible liabilities and cantonal tax-free allowances. The canton applies a proportional wealth tax rate (simple rate currently 1.5‰ of taxable wealth), so the treatment of exemptions and deductions directly influences the final tax bill.

This overview follows the structure of the Steuergesetz des Kantons Appenzell Innerrhoden (StG-AI), in particular the section on Vermögenssteuer (Art. 41 ff. StG-AI), and the explanatory notes in the Kantonsblatt Appenzell Innerrhoden and ESTV canton leaflet for wealth tax.

Personal Allowances

Appenzell Innerrhoden grants tax-free allowances (steuerfreie Beträge) on wealth that depend on filing status and personal circumstances (e.g. marital status, dependent children). These amounts are set in the cantonal Steuerparameter for each tax year and applied based on the situation as at 31 December.

Exact allowance figures are published each year in the cantonal tax parameters and in the ESTV canton leaflet for Appenzell Innerrhoden (section on wealth tax). When preparing a return, always use the values for the relevant tax year.

Debt Deductions

Wealth tax is calculated on net wealth, so legally enforceable, documented liabilities can be deducted from gross assets as at 31 December of the tax year. In Appenzell Innerrhoden, typical deductible debts include:

• Mortgage balances on Swiss and foreign real estate held privately
• Bank loans, investment credit lines and margin loans
• Private loans with written agreements and evidential interest terms
• Outstanding federal, cantonal and communal tax liabilities

Foreign-currency debts are converted into CHF using the official year-end exchange rates applied by the cantonal tax administration (usually based on Federal Tax Administration rates).

Contingent or informal obligations (e.g. guarantees, sureties or letters of comfort) are not deductible until they materialise as an actual, enforceable liability.

Pension Assets & Retirement Accounts

The Appenzell Innerrhoden tax code treats certain retirement savings as wealth-tax-exempt until benefits are paid out. In particular:

• Occupational pension assets in Swiss 2^nd pillar schemes (berufliche Vorsorge / BVG) are exempt while capital remains in the pension fund.
• Tied individual retirement accounts (pillar 3a) are likewise excluded from taxable wealth.

Ordinary savings and investments (pillar 3b) remain fully taxable. Pension buy-ins and 3a contributions mainly reduce income tax; they influence wealth tax only to the extent that funds move from taxable private accounts into exempt pension vehicles.

Valuation Adjustments

Under Art. 41–42 StG-AI, the wealth tax base consists of the taxpayer’s entire net wealth, generally valued at market value (Verkehrswert) at year-end. However, several categories of assets benefit from specific valuation rules:

• Household effects: normal household goods and personal items (Hausrat und persönliche Gebrauchsgegenstände) are exempt and do not form part of taxable wealth.
• Securities: listed shares, bonds and funds are valued at their official year-end prices; where no market price exists, a realistic inner value is used.
• Unlisted business interests: typically valued using income- and asset-based methods referenced in cantonal practice; the result may be below pure book equity, effectively reducing the taxable value.
• Real estate: private real estate is valued at official value / market value according to the cantonal rules. Agricultural property may be assessed at Ertragswert with special treatment for supplementary wealth tax (ergänzende Vermögenssteuer) when land use changes.
• Life and annuity policies: policies with a surrender value are subject to wealth tax at their surrender value; non-surrenderable claims remain outside the wealth tax base.
• Cryptocurrencies and digital assets: generally valued at the official year-end prices published by the Federal Tax Administration.

Marital Property & Family Context

Appenzell Innerrhoden taxes married couples living in a legally and factually undissolved marriage jointly. Their income and wealth are aggregated regardless of the matrimonial property regime, and the joint wealth tax allowance is applied.

The assets of minor children under parental authority are attributed to the parent(s) for wealth tax purposes, with any child-related allowances granted on that basis. Where children earn independent employment income or own property under specific arrangements, special rules may apply.

Gifts and inheritances during the year are included in taxable wealth as at 31 December, unless they qualify for a specific exemption (for example, certain pension and insurance benefits). Separate cantonal rules govern inheritance and gift tax, which should be considered alongside wealth tax planning.

Documentation & Compliance

To support the wealth tax declaration, the Appenzell Innerrhoden tax administration expects clear, consistent documentation for both assets and liabilities, such as:

• Year-end bank and custody statements for cash, securities and fund holdings
• Mortgage and loan balance confirmations as at 31 December
• Written loan agreements for private debts, including interest arrangements
• Pension fund statements (2^nd pillar) and pillar 3a account overviews
• Valuation reports or tax values for real estate and major private business interests, where relevant

Aligning figures between the income tax and wealth tax sections (e.g. for investment portfolios or rental properties) helps avoid follow-up queries and adjustments during assessment.

Planning Insights

• With its proportional wealth tax rate, Appenzell Innerrhoden is relatively attractive for higher-net-worth individuals. However, because the rate applies to all wealth above the cantonal allowance, optimising the net wealth position at year-end is still worthwhile.
• Financing structures (mortgages, investment loans) can meaningfully lower taxable net wealth, but interest reduces your net return and may have income-tax implications. Analyse both sides before increasing debt purely for wealth-tax reasons.
• Shifting from non-productive assets (excess cash, underused collectibles) into diversified portfolios or tax-advantaged pension vehicles can improve the risk/return profile and, in some cases, reduce the wealth tax burden.
• Intra-family arrangements (early inheritances, gifts or loans to children) can influence which family member bears wealth tax. Only properly documented transfers are recognised, and they may trigger inheritance or gift tax, so coordination across all tax areas is crucial.