100 Rhône Avocats

As of September 16, 2011, a popular initiative called « Imposer les millions des successions pour notre AVS (réforme de l’impôt sur les successions) » has been published in the « Feuille fédérale ».

This initiative aims to establish an inheritance and donation tax at a national scale while that situation is actually regulated by the cantons. It proposes a uniform tax rate of 20%, independently of the level of kinship between the deceased and the heirs, with a franchise of 2 Million Swiss francs and some exemptions for the farming enterprises and other family businesses.

Especially considering the high franchise amount and the exemptions contained in the initiative it can be anticipated that the initiative will encounter some success and might be approved by the Swiss population.

The initiative contains a clause which states that every donation made after January 1^st, 2012, will be taxed at the time of the opening of the succession. That clause aims to avoid that donations exempt from the new tax be performed in favor of the descendants before the new law enters into force in order to circumvent it.

However it should be noted that under Swiss law a donation can be submitted to a right of usufruct which allows the donor to keep, in fact, the same rights concerning the values subject to the donation.