Case studies, slides and detailed solution notes from the workshop held by Hanna Brozzo and Iring Christopeit on October 28, 2025 on the occasion of the ISIS seminar "Gratuitous asset transfers in tax law".
Note: This language version is an automatically generated translation. The text may therefore contain linguistic and terminological errors.
view in original language (German)Alina died on March 10, 2025, in Madrid, Spain, where she had been residing for over 20 years. She was a Swiss citizen with her place of origin in Basel-Stadt. In her holographic will, in the absence of statutory heirs, she named a friend residing in Basel as her sole heir and subjected the estate (consisting of a substantial portfolio of securities held in a bank account in Basel) to Swiss law
In the presence of the appointed sole heir, the will was opened on April 26, 2025, by the Probate Office of Basel-Stadt.
Can the estate be taxed in the Canton of Basel-Stadt?
What would be the situation if Alina had been a German citizen and her will had been opened in Hamburg under German law?
Beat died on May 15, 2025, with his last place of residence in Zurich (Swiss citizen).
He was a gallery owner and ran a renowned gallery in Zurich (sole proprietorship “Beatus ART,” headquartered in Zurich).
His only daughter has been managing the Zurich gallery as an employee for a few years.
There is also a branch office in St. Gallen with a permanent sales exhibition of Beat’s own art collection.
The art collection exhibited in St. Gallen is managed by his nephew and currently has a book value of CHF 5 million, which corresponds to the acquisition costs. A recent (2025) appraisal by AXA Art Versicherungen AG values it at CHF 7.8 million.
In early 2025, Beat rejected an offer of over CHF 4 million from an art dealer for a single painting from his collection exhibited in St. Gallen. This work is currently insured for CHF 2.1 million (based on the valuation).
In his will, his daughter (resident of Zurich, Swiss citizen) is named as the sole legal heir, and his nephew (resident of St. Gallen, Swiss citizen) is the beneficiary of the art collection in St. Gallen (no violation of the right to a compulsory share).
How is the nephew’s bequest taxed?
Same basic facts, but the nephew resides in Stuttgart.
Same as the basic facts, but Beat (a Swiss citizen) had his last place of residence in Munich.
Same as the basic facts, but the sole proprietorship is not based in Zurich, but in Munich. The permanent establishment in St. Gallen remains unchanged.
The facts are essentially the same as in the basic facts of Case 3, with the difference that the two galleries were each operated as stock corporations (“Beatus ART AG” with its registered office in Zurich, “Beatus Art Collection AG” with its registered office in St. Gallen). The shares of the two companies were part of Beat’s private assets; he himself was no longer actively involved in the business.
Accordingly, Beat bequeathed the shares of “Beatus Art Collection AG” to his nephew.
How is the nephew’s bequest taxed?
Same facts as above, but the nephew (a Swiss citizen) is domiciled in Stuttgart.
Same as the basic facts, but the nephew (a Swiss citizen) resides in Stuttgart, and Beat gifts him the shares during his lifetime.
Same as the basic facts, but Beat was a German citizen and moved from Germany to Switzerland—specifically to the canton of Schwyz—four years before his death. He was subject to modified lump-sum taxation (expense-based taxation under Art. 14 DBG).
Caroline (a Swiss citizen) resides in Hamburg. Her brother David (a Swiss citizen) resides in St. Gallen. David wishes to purchase from Caroline the 10% stake she holds in the family business “Gross AG,” headquartered in Switzerland, in order to gain 100% ownership of the company. Caroline is willing to facilitate this at a favorable price but wants to ensure that her retirement provisions are secured, as she otherwise has no significant assets. The two agree on the following:
The usufruct is valued at CHF 2,429,050. Given that Caroline is 74 years old (born in 1951), this value corresponds to an average annual net income of CHF 185,000 paid out until the end of her life (basis: present value table for a life annuity commencing immediately, payable monthly in advance, capitalization interest rate 3.5%).
The market value of the property is currently CHF 5,000,000. The net income from the property subject to usufruct amounted to an average of CHF 243,000 over the past three years (CHF 261,000 in 2022, CHF 246,000 in 2023, and CHF 222,000 in 2024). Thus, the determination of the usufruct value is approximately 17% (relative to the 2024 net income) to approximately 24% (relative to the average net income from 2022 to 2024) below market value.
Eric (a German citizen) moved from Hamburg to St. Gallen 11 years ago after giving up his business activities. He passes away in November 2025. At that time, he owns only real estate assets, namely a large, owner-occupied property in St. Gallen and a rented apartment building in Germany. His heirs are his two children, Felix and Helga (both German nationals). Felix lives in Hamburg. Helga lives in Zurich.
What taxes does the inheritance trigger for Felix and Helga?
What are the inheritance tax consequences if Eric transferred his primary residence and the rental property into a Swiss corporation (AG) that he wholly owns prior to his death (incorporation by contribution in kind)?
What are the tax consequences if Eric transfers his primary residence and the rental property during his lifetime, free of charge, to a Swiss corporation (AG) owned 50% by Felix and 50% by Helga (recorded by the AG as extraordinary income)?
How would the case described in Option 2 be assessed if the transfer were to take place by will upon death?
