The principle: no federal tax, all cantonal
Unlike France or Germany, Switzerland has no federal inheritance tax. Each canton sets its own regime. Consequence: depending on your last domicile, your family will pay 0-50% of the estate value. Schwyz, Obwald and Nidwald abolished it long ago. French-speaking cantons (Geneva, Vaud, Neuchâtel) have the heaviest regimes, especially for non-relative heirs (partner, friend, nephew). For spouses and direct descendants (children, grandchildren), exemption is total or near-total in every canton.
Cantonal comparison: Geneva vs Vaud vs Zurich
Geneva: 0% for spouse and direct descendants, but a steep progressive scale for others (up to 26% for an unrelated friend). Vaud: 0% for spouse/direct, 7-25% for relatives, 22-50% for non-relatives — Switzerland's heaviest. Zurich: 0% direct line, 6-36% relatives/grandchildren above thresholds, 12-36% non-relatives. On CHF 500,000 left to an unrelated friend: Geneva ~CHF 130,000, Vaud ~CHF 200,000, Zurich ~CHF 130,000, Schwyz: CHF 0.
Lever 1: lifetime gift as advancement
A lifetime gift to a forced heir (child) counts against their estate share. Upside: in some cantons, gifts older than 5 years fall fully outside the taxable estate. Limit: other children's reserved share must be preserved (at least 50% per child of the parent's assets). Polia tip: for families with > CHF 2M and several children, staggering gifts over 10-15 years often clears CHF 200-400k of potential tax.
Lever 2: pillar 3a, pension and life insurance outside estate
Pension assets (2nd pillar, 3a, and some linked life policies) don't fall into the classic estate. They go directly to designated beneficiaries per a legal hierarchy (spouse/registered partner → children → others). Upside: no cantonal inheritance tax in most cantons (they're taxed as a separate capital benefit at preferential 5-12%). On a combined 3a + 2nd-pillar capital of CHF 500,000, the saving vs ordinary estate can reach CHF 50-80,000.
Lever 3: change canton 5 years ahead
Inheritance tax is due in the canton of the deceased's last tax domicile — not their birth canton nor the heirs' canton. On a large estate (> CHF 5M) with non-relative heirs, moving to Schwyz, Obwald or Nidwald 5+ years before death can save CHF 500,000-2M. Cost: real (not fictitious) domicile change, meaning you actually live mostly in the new canton. Especially fit for retirees with no strong professional anchor elsewhere.
