Switzerland is preparing for a pivotal referendum in November that could impose a federal inheritance and gift tax of 50% on wealth transfers exceeding 50 million Swiss Francs ($61 million). Unlike the current cantonal taxes, this proposed levy would be nation-wide, with no exemptions for spouses or direct heirs. This has raised concerns among financial advisors and the country’s ultra-wealthy.
The tax proposal, initiated by the far-left Young Socialists party in 2022, has unsettled Switzerland’s financial and legal circles. Swiss law mandates that any proposal backed by at least 100,000 signatures must go to a nationwide vote. Lawyers and bankers caution that this looming vote is already driving some of the country’s wealthiest families to consider relocating.
“Swiss-based families have decided not to take any risk and to relocate ahead of the vote,” said Frédéric Rochat, managing partner at Geneva-based Lombard Odier. A Zurich-based private banker noted that a top client had already moved to Liechtenstein, fearing future political volatility even if the referendum fails. The timing of the Swiss vote is particularly sensitive.
It follows changes in the UK that extended inheritance tax to the global assets of non-domiciled residents, prompting an exodus of wealthy individuals.
Ultra-wealthy reconsider Swiss residence
Other countries, including Italy, Greece, and the UAE, are actively courting such individuals with more favorable tax regimes.
If approved, Switzerland’s tax would be more punitive than Italy’s 4-8% inheritance tax rates and much less competitive than jurisdictions like Dubai or Hong Kong, which have no inheritance or gift taxes. Peter Spuhler, billionaire owner of Stadler Rail, labeled the proposal “a disaster for Switzerland,” warning his heirs could face a tax bill as high as 2 billion Swiss Francs. Business lobby group Economiesuisse has echoed these concerns, stating that the measure “endangers Switzerland’s position as a reliable and stable business location internationally.”
Despite both chambers of the Swiss parliament and the federal executive council rejecting the proposal, the upcoming referendum has already damaged the country’s reputation for stability.
Stefan Piller of BDO Zurich warned that several family-run businesses could face existential challenges if the proposal is enacted. Experts believe the referendum is unlikely to succeed due to Swiss voters’ traditional resistance to wealth taxes. The vote would require a double majority — both from the national popular vote and from the country’s 26 cantons.
However, some argue that even a narrow defeat could spur future proposals, prolonging a cycle of uncertainty. “If it’s voted down with a very small majority, then we could easily be in the same situation again in a few years,” said Rochat. “It needs to be voted down with such an overwhelming majority that this possibility can be put to bed for 20 years.”
For now, the possibility of a 50% federal inheritance tax is unsettling the country’s financial elite and threatening Switzerland’s long-standing status as a global safe haven for wealth.
