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bigduckontax, Accountant
Category: UK Tax
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I am a UK citizen and have inherited money from a dual citizenship

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I am a UK citizen and have inherited money from a dual citizenship (UK and Swiss) life-long friend who died in Canton Bern. I was the direct beneficiary of her Swiss Insurance policy and also am due monies from her UK will. I now have a tax demand from Canton Bern for 16% inheritance tax on the total amount inherited in both Switzerland and UK. Am I liable to pay this? My only connection to Switzerland is my deceased friend.
Hello, I'm Keith and happy to help you with your question.

Here is the position for Inheritance Tax (IT) in Switzerland which is not a federal tax, but a canton imposed one and varies from location to location:

Inheritance taxes are imposed by the cantons and communes in the following situations:

'Estates of deceased persons having had their last domicile in Switzerland;

and Estates of foreign deceased persons involving the transfer of Swiss real property or unincorporated business enterprises in Switzerland.

Rates depend upon the existing relationship (i.e. the relationship between the deceased and the heirs, or between the donor and the donee) and the size of the inheritance or gift. Interspousal gifts and inheritances collected by the surviving spouse are frequently exempt or taxed at very low rates (up to 6%). Gifts to and inheritances received from unrelated persons attract rates ranging from 20% to 40%'

From that it seems likely that your friends estate was liable to IT. I would have thought that it would have to be paid out by the executors before probate was given, but, of course, that's how we do it here ans in the States, not necessarily Switzerland. The demand is almost certainly correct and 16% is the correct rate for unconnected beneficiaries in the canton of Bern.
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