The management of estates involving real estate located abroad represents a complex challenge for heirs and legal professionals in Switzerland. This problem raises numerous legal and tax issues, particularly in terms of territorial jurisdiction, applicable law and recognition of foreign decisions. The multiplicity of legal systems involved and potential conflicts of law make these situations particularly tricky to handle. It is therefore essential to have a clear understanding of the mechanisms and rules governing international successions, to ensure an efficient transfer of assets in accordance with the wishes of the deceased.
Swiss international inheritance law is based on a number of legislative and treaty sources. The Federal Act on Private International Law (LDIP) is the reference text in this field. It defines the rules governing the jurisdiction of Swiss authorities, as well as the criteria for determining the law applicable to international successions.
Under article 86 of the LDIP, the Swiss authorities are competent to deal with an estate if the deceased had his last domicile in Switzerland. They may also intervene if the deceased was of Swiss nationality and had chosen Swiss law to govern his or her succession. In certain cases, subsidiary jurisdiction may be granted to the Swiss authorities, notably when foreign authorities are not dealing with the succession.
With regard to the applicable law, Article 90 of the LDIP stipulates that succession is in principle governed by the law of the state in which the deceased had his last domicile. However, a testator may choose to submit his succession to the law of one of his national states. This choice of law must be expressed in a disposition mortis causa (will or contract of inheritance).
It should be emphasized that these rules apply to the entire estate, including real estate situated abroad. However, Switzerland recognizes the principle of split inheritance applied by certain countries. Under this principle, real estate is governed by the law of its location, while movable property is subject to the law of the deceased’s last domicile.
Switzerland is a party to several international conventions on succession, including the Hague Convention of October 5, 1961 on the Conflicts of Laws Relating to the Form of Testamentary Dispositions. This convention facilitates international recognition of the formal validity of wills.
On the other hand, Switzerland has not ratified the European Inheritance Regulation (no. 650/2012), which harmonizes rules on jurisdiction and applicable law within the European Union. This non-accession may give rise to practical difficulties in dealing with successions involving assets located in EU member countries.
The presence of foreign real estate in an international succession raises specific issues. Indeed, many countries apply the lex rei sitae principle, according to which the law applicable to real estate is that of the place where it is located. This approach may conflict with the principle of unity of succession under Swiss law.
In practical terms, this means that real estate located in a foreign country could be subject to different inheritance rules from those applicable to the rest of the estate. This situation can have significant consequences for the distribution of the estate and respect for the deceased’s wishes.
To deal with these difficulties, it is advisable to anticipate and carefully plan the transfer of international real estate assets. This may involve drafting multiple wills, adapted to the specific features of each country concerned, or setting up appropriate legal structures (real estate partnerships, trusts, etc.).
The taxation of international inheritances is a major issue, particularly when foreign real estate is involved. In Switzerland, inheritance tax is levied at cantonal level, with regimes varying widely from one canton to another. Some cantons exempt lineal heirs completely, while others apply progressive rates.
When foreign real estate is included in an estate, several tax scenarios may arise:
There is a real risk of double taxation in the absence of a tax treaty between Switzerland and the country where the property is located. In this case, inheritance tax could be payable both in Switzerland (based on the domicile of the deceased) and in the foreign country (based on the location of the property).
Switzerland has signed double taxation agreements on inheritance with several countries, including France, Germany and the United States. These agreements aim to avoid double taxation, and define how the right to tax is shared between the states concerned.
Even in the absence of a tax treaty, some Swiss cantons grant a tax credit for inheritance tax paid abroad. This measure reduces the overall tax burden for heirs.
It is essential to carry out an in-depth tax analysis for each international inheritance situation. The tax consequences can have a considerable impact on the net value of assets passed on to heirs.
Settling an international estate involving real estate abroad often requires the completion of specific formalities in each country concerned. These procedures can be complex and time-consuming, which is why it’s a good idea to enlist the help of competent professionals.
In Switzerland, the certificate of inheritance is the document that attests to the status of heir. It is issued by the competent authority in the place where the estate is opened. In an international context, this document may not be recognized abroad, or may require legalization or apostille to be valid.
Each country has its own rules for transferring real estate ownership in the event of succession. These procedures may involve local notaries, tax certificates or specific land registries.
Managing an international estate often requires close coordination between Swiss and foreign authorities. This collaboration is essential to ensure consistency in estate processing and to avoid conflicts of jurisdiction.
The complexity of international estates involving foreign real estate requires careful planning. A number of tools and strategies can be implemented to optimize the transfer of assets and minimize the risk of conflicts.
The express choice of the law applicable to the entire succession can help avoid fragmentation of the estate and ensure consistency in the treatment of the succession. This choice must be made in compliance with the conditions laid down in the LDIP.
It may be advisable to draw up separate wills for each country where real estate is located. This approach makes it possible to adapt testamentary provisions to local legal specificities, while ensuring the overall coherence of estate planning.
The use of legal structures such as real estate partnerships or trusts can offer greater flexibility in the management and transfer of international real estate assets. However, these solutions must be implemented with care, taking into account the tax and legal implications in each jurisdiction concerned.
In certain cases, the early transfer of real estate through a gift can be advantageous, particularly from a tax point of view. This option must be considered on a case-by-case basis, according to the legislation in force and the donor’s financial objectives.
The management of international estates involving real estate abroad remains a complex area of Swiss law. The multiple interactions between the legal and tax systems of the countries concerned call for specialized expertise and a tailored approach to each situation. Legal professionals specialized in this field play a decisive role in assisting clients faced with these issues. They can anticipate difficulties, optimize estate planning and facilitate the settlement of international successions, while respecting the wishes of the deceased and the interests of the heirs. In this context, the services of a specialized law firm can prove invaluable in navigating the legal and administrative intricacies of cross-border successions.