Tax glossary
Inheritance and gift tax
Inheritance and gift tax is a cantonal tax on assets received through an inheritance or a gift; in the Canton of Zurich, spouses, registered partners and direct descendants are fully exempt.
Switzerland has no federal inheritance or gift tax. It is a matter for the cantons, and each one has its own rules. In the Canton of Zurich the Inheritance and Gift Tax Act (ESchG) applies. The tax is paid by the recipient: the person who inherits, receives a legacy or is given a gift. The relevant canton is the one where the deceased last lived or where the donor lives; for real estate, the canton where the property is located.
The key rule for most families: spouses, registered partners and descendants — children, grandchildren, great-grandchildren — are fully exempt from inheritance and gift tax in Zurich. No gift tax return is required for gifts to these people either. All other recipients pay tax, but with allowances and rates that depend on how closely they are related.
The tax is calculated on the market value of the assets received, not on the lower values used for income and wealth tax. This matters especially for real estate. For gifts, the recipient must file a gift tax return within three months without being asked; for inheritances, the Cantonal Tax Office opens the procedure itself.
Allowances by relationship
If you are not exempt, part of the inheritance or gift can still be received tax-free. The allowance is granted only once per recipient and per deceased or donor; several gifts from the same person are added together. As of tax year 2025:
- Parents: CHF 200,000
- Siblings and grandparents: CHF 15,000
- Stepchildren, godchildren, foster children: CHF 15,000
- Unmarried partner after at least five years in the same household: CHF 50,000
- Customary occasional gifts up to CHF 5,000 each are tax-free
How the tax is calculated
First, a basic tax is calculated using a standard rate schedule: 2% on the first CHF 30,000, rising in bands to 6%; above CHF 1,500,000, 6% applies to the whole amount. This basic tax is then multiplied according to the relationship.
For unmarried couples this is crucial. If you are not married or in a registered partnership, you count as unrelated and pay six times the basic tax — up to 36% of the amount inherited. Wills, marriage contracts and life insurance should therefore be reviewed early.
- Parents: 1×
- Grandparents, stepchildren: 2×
- Siblings: 3×
- Step-parents: 4×
- Uncles, aunts, nieces and nephews: 5×
- Everyone else, including unmarried partners: 6×, up to 36%
Deductions and valuation
Before the estate is divided, the deceased's debts, the costs of settling the estate and the costs of death notices, funeral, headstone and grave upkeep are deducted. For these funeral costs the tax office applies a flat rate of up to CHF 12,000; higher costs must be documented.
Separately from inheritance tax, heirs must include what they inherit on their own tax return: the inherited assets increase their wealth tax from the date of inheritance, and the income they generate is taxable.
Example: An estate for a niece and a partner
A childless man from Winterthur leaves CHF 200,000 to his niece and CHF 300,000 to his partner of twelve years in his will. The niece has no allowance. Her basic tax is CHF 600 + CHF 1,800 + CHF 3,600 + CHF 1,000 = CHF 7,000; multiplied by 5, she owes CHF 35,000.
His partner receives the CHF 50,000 allowance, leaving CHF 250,000 taxable. The basic tax is CHF 9,500; multiplied by 6, she owes CHF 57,000. Had they been married, her inheritance would have been entirely tax-free. We run through comparisons like this with couples before it's too late.
Frequently asked questions: Inheritance and gift tax
Do children pay inheritance tax in Zurich?
No. Descendants are fully exempt in the Canton of Zurich — including grandchildren. Stepchildren, however, do not count as descendants and have only a CHF 15,000 allowance.
Do I need to report a gift to my child?
No gift tax return is required for gifts to spouses, children, grandchildren or registered partners. The assets will, however, appear on the child's own tax return.
What if the deceased lived in another canton or abroad?
Within Switzerland, the rules of the deceased's canton of residence apply, even if you live in Winterthur. Zurich only additionally taxes real estate located in the canton. For estates from abroad, the foreign country's rules and any treaty need to be checked.
Is an inheritance taxable as income?
No. Inheritances and gifts are exempt from income tax. The inherited assets and their income are, however, taxable from the date of inheritance.
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