The management of estates involving real estate located abroad represents a complex challenge for heirs and legal professionals in Switzerland. This issue raises many legal and tax questions, particularly with regard to territorial jurisdiction, applicable law and the recognition of foreign decisions. The multiplicity of legal systems involved and the potential conflicts of laws make these situations particularly difficult to deal with. It is therefore essential to have a good understanding of the mechanisms and rules governing these international successions in order to ensure an efficient transfer of assets in accordance with the deceased’s wishes.
Swiss law on international successions is based on several legislative and conventional sources. The Federal Act on Private International Law (FAPIL) is the reference text in this area. It defines the rules of jurisdiction of the Swiss authorities as well as the criteria for determining the law applicable to international successions.
Under Article 86 LDIP, the Swiss authorities are competent to deal with an estate if the deceased was last domiciled in Switzerland. They may also intervene if the deceased was a Swiss national and had chosen Swiss law to govern his or her estate. In some cases, subsidiary jurisdiction may be recognized for the Swiss authorities, particularly when foreign authorities are not dealing with the estate.
With regard to the applicable law, Article 90 LDIP stipulates that the 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 of property upon death (will or agreement as to succession).
It should be emphasized that these rules apply to the entire estate, including real estate located abroad. However, Switzerland recognizes the principle of division of the estate applied by certain States. According to 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 party to several international conventions on inheritance matters, including the Hague Convention of October 5, 1961, on the conflicts of laws regarding the form of testamentary dispositions. This convention facilitates the recognition of the formal validity of wills at the international level.
However, Switzerland has not ratified the European Succession Regulation (No. 650/2012), which harmonizes the rules of jurisdiction and applicable law within the European Union. This non-accession may cause practical difficulties in the handling of successions involving property located in EU member countries.
The presence of real estate abroad in an international succession raises specific issues. Many countries apply the principle of lex rei sitae, 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 the succession provided for by Swiss law.
In concrete terms, this means that a property located in a foreign country could be subject to inheritance rules that differ from those applicable to the rest of the estate. This situation can have significant consequences on the distribution of the estate and respect for the wishes of the deceased.
To deal with these difficulties, it is advisable to anticipate and plan carefully the transfer of international real estate assets. This may involve drawing up multiple wills, adapted to the specific features of each country concerned, or even setting up appropriate legal structures (non-trading property companies, trusts, etc.).
The taxation of international successions is a major issue, particularly when real estate located abroad is involved. In Switzerland, inheritance taxes are levied at the cantonal level, with very different systems from one canton to another. Some cantons completely exempt direct heirs, while others apply progressive rates.
When foreign real estate is included in an inheritance, several tax scenarios may arise:
The risk of double taxation is real 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 concluded double taxation agreements on inheritance matters with several countries, including France, Germany and the United States. These agreements aim to avoid double taxation and define the terms for the distribution of the right to tax between the States concerned.
Even in the absence of a treaty, some Swiss cantons grant a tax credit for inheritance taxes paid abroad. This measure helps to reduce the overall tax burden for heirs.
It is essential to conduct a thorough tax analysis for each international inheritance situation. The tax consequences can have a considerable impact on the net value of the assets transferred to the heirs.
The settlement of 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, hence the importance of surrounding yourself with competent professionals.
In Switzerland, the certificate of inheritance is the document that certifies the status of heir. It is issued by the competent authority of the place where the estate is opened. In an international context, this document may not be recognized abroad or may require a legalization or apostille procedure to be valid.
Each country has its own rules for the transfer of real estate ownership in the event of inheritance. These procedures may involve the intervention of local notaries, the obtaining of tax certificates or even registration in specific land registers.
The management of an international inheritance often requires close coordination between Swiss and foreign authorities. This collaboration is essential to ensure consistency in the handling of the inheritance and to avoid conflicts of jurisdiction.
Given the complexity of international estates involving real estate abroad, careful planning is essential. Several tools and strategies can be implemented to optimize the transfer of assets and minimize the risk of conflict.
The express choice of the law applicable to the entire estate can help avoid the fragmentation of the estate and ensure consistency in the handling of the estate. This choice must be made in accordance with the conditions laid down by the LDIP.
It may be advisable to draw up separate wills for each country in which real estate is located. This approach allows the testamentary provisions to be adapted to local legal specificities while ensuring the overall consistency of estate planning.
The use of legal structures such as non-trading property companies or trusts can offer greater flexibility in the management and transfer of international real estate assets. However, these solutions must be implemented with caution, taking into account the tax and legal implications in each jurisdiction concerned.
In some cases, the early transfer of real estate through gifts can have advantages, particularly in terms of taxation. This option must be studied on a case-by-case basis, depending on the legislation in force and the donor’s wealth 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 require specialized expertise and a tailor-made approach for each situation. Legal professionals specializing in this field play a decisive role in assisting clients confronted with these issues. Their intervention makes it possible to anticipate difficulties, optimize estate planning and facilitate the settlement of international estates in accordance with the wishes of the deceased and the interests of the heirs. In this context, the use of a specialized law firm can be invaluable in navigating the legal and administrative intricacies of cross-border estates.
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