Following a death in the family, my sister (who lives in the UK) and I will jointly inherit a house in England. The house is currently rented out.
I have a couple of questions, which someone who has been in a similar situation may be able to answer:
I know that there will be inheritance tax to pay in the UK. Does Switzerland have a tax agreement with the UK, or will I be taxed here as well? If we decide to keep the house, I know that I will be taxed in Switzerland on the rental value. Given that I will only be half owner of the house, will I be taxed on the full rental value, or on half of it? If we decide to sell the house, will the proceeds simply become part of my fortune/Vermögen, or does something special apply because it's a property sale?
Swiss cantonal inheritance taxation is based on the last place of residence of the testator or in case of a real estate the place where the real estate is located. If the real estate is abroad there will be no Swiss inheritance tax.
A double taxation treaty would become important if testator lived abroad and the real estate is located in Switzerland. For example there is still no double taxation agreement with France which would handle this.
Swiss canton real estate gain taxation is again based on the rules of the canton where the real estate is located. A real estate located abroad is thus not subject to Swiss canton real estate gain taxation.
If you use the property for your own you would have to declare imputed rental income according your ownership share. If you rent it out (like to the other owner) you would have to declare the gross rental income. However, if rental income is less than imputed rental income, the latter is used.
There are different ways and method how imputed rental income is calculated. As a rule of thumb (actually law and federal court ruling) it should be around 60% of a comparable market rent. But some methods using the real estate value might bring this value down to 50%.
From the (impute) rental income you can deduct your share of the rental estate expenses.
The (impute) rental income will be used to determine your income tax rate but will not be directly taxed in Switzerland. (revenu déterminant le taux d'imposition VS. revenu imposable)
I have been through this, most recently in 2015 and can confirm what ASITUS has said.
There was no inheritance tax to pay in Switzerland but you may want to give the bank and the tax office a heads up if you receive a large sum in your bank account here before they start questioning you about where the money came from.
The house will already become part of your wealth thus declarable even if you don't sell it. As I understand it there's no capital gains tax in Switzerland if you sell it later but there would/could be in UK.
Opening this one up again, just in case someone has been through the same process and knows the answer - otherwise I will use a Treuhand.
I am doing my Swiss tax declaration for 2023. My mother's inheritance was finalised in February 2023, and UK inheritance tax has been paid on the total value of the estate, which includes a house.
The transfer of the house to my sister's and my names is still going through the UK Land Registry administrative process (it's been 18 months now and still no end in sight). The house was therefore still in the name of my mother's estate as of 31 December 2023.
For Swiss tax declaration purposes, does the house already belong to me, or will this only happen when the Land Registry process is completed?
Same as you did for tax year 2022. You declare you share of the estate as wealth, and your share of the estates profit (but not capital gain) as income.
Some cantons have special forms were you can declare the non divided estate (ex. Bern), in others you will have to draw up an inventory yourself (ex. Zurich).
In Lucerne, they have the “Fragebogen für Erbengemeinschaften, Gemeinderschaften und einfache Gesellschaften” you can order it online or get it from your local tax office. https://steuern.lu.ch/publikationen/…liche_personen Might be also be available inside the tax software. See also item 164 on page 23 and item 414 on page 35 of the Wegleitung.
I didn't do anything in 2022, because the value of the estate was not yet confirmed at the point where I filled in my Steuererklärung.
Thanks for the link, I will look into this, and will see if the relevant form pops up in the online declaration if I choose the right options on the first page.
In Kanton Bern your property needs to be declared only once it registered in your name (“Eintragung ins Grundbuch”)
3 Declaration of property
The official value of the property must be declared by the person who is registered as the owner in the land register at the end of the year.
This applies when you purchase property. Differently when you are a member of a “inheritance estate partnership” (Erbengemeinschaft) which owns the property: See explanation from canton Bern https://www.wegleitung.sv.fin.be.ch/…chaften_de.pdf