Asset Life Cycle, Inheritance Tax and International Assets

• Examinations involve right to notes and focus on course content, emphasizing diagnostic skills.
• Use of highlighters and sticky notes is recommended, along with practical application over theoretical knowledge.
• Personal assignments require oral presentations of the course material.

Phases of Asset Life

• There are three lifecycle phases of an asset: acquisition, management, and disposal.
• Inheritance is mainly in Swiss, emphasizing the Canton of Vaud's law.

International Assets

• The international element includes double taxation issues.
• Tax evasion involves non-declaration of Swiss or international assets

Asset Acquisition

• Assets can be acquired in two ways: free and onerous
• The most frequent free method is inheritance. Inheritance and gift taxes are in place
• Acquired properties may be acquired with payment

Inheritance Tax

• Inheritance tax is a historical tax on asset transfer, paid by the beneficiary
• It does not consider the taxpayer's ability to pay and is somewhat independent of financial status
• Legal doctrine questions using indirect taxation, yet the Federal Court has softened this position
• The Federal court indicates that inheritance tax is on total transmitted value, like income and wealth taxes, targeting the person's enrichment
• Tax rate progression is typical for direct taxes, allowing higher payments when more comfortable.
• Inheritance taxes usually demonstrate rate progression, with the amount received impacting it, not the beneficiary's ability to pay

Estate Taxation Models

• Successions can be taxed by taxing the total mass, regardless of the recipient (UK model), or by taxing each heir's share individually which allows impots based on relationship to the de cujus. In Switzerland, inheritors can select how hereditary shares are taxed.
• Degree of kinship affects inheritance tax, with distant relationships taxed higher
• Despite this, many cantons no longer tax direct descendants.

Election Promises

• Inheritance tax is often a political promise.
• The US and Italy have made numerous taxation changes.

Swiss Tax Rates

• Switzerland generally taxes less than neighboring countries.
• The average tax rates are Germany at 30% in direct line and France at 45% for descendants and 60% for distant kin, with Europe generally taxing higher.
• Switzerland offers a lighter tax load than OECD countries, and IS rates have recently decreased between children and parents.
• Inheritance taxes between children and parents is abolished in most cantons, retaining it are Vaud, Neuchâtel, and Appenzell Rhodes Intérieur.
• Surviving spouses still pay inheritance tax across Switzerland.

Political Views

• Imposing triple taxation on the same amount, with estate, IS and wealth taxes
• Exploiting the FIS potential of successions by rejecting the federal IS of 20% and competence.
• An inheritance tax of 50% but only applies to fortunes over 50 million.
• Swiss inheritance tax is cantonal and not federal, and the federal government has no constitutional basis for a federal IS.

Primary Fiscal Responsibility

• The primary fiscal competence is cantonal with non-harmonized IS due to indirect taxation that is not constitutionally compulsory. However, cantons cannot do whatever they want, and are limited by constitutional framework
• The principle impacting inheritance tax is interdiction of double cantonal taxation.

Interstate Distribution of Taxation Rights

• Taxation of assets is clearly defined in the constitution, as well as its interdiction by the TF
• The ban doesn't target only direct taxes (most frequent) but also others (donation, inheritance, succession), and federal law has failed to legislate these matters.
• Jurisprudence then handles those matters and has, for a hundred years, defined the field.
• There isn't any law but there is a guarantee of tax payers against double taxation of assets by different cantons.
• In that matter, the legislation focuses on simplifying conflict resolution with a few problems around the law's applicability.
• When deceased was from Vaud, one inheritor from VD and one from Zoug, the location of the assets define how and by which canton to tax.
• Distinctions are made amongst asset type (furniture and real estate location).
• Furniture is bound to the estate's former last address, while real estate is taxed by the canton in which the act occurred.
• All bank transfer operation, are centralised to the latest address available for the de cujus.
• For someone owning a Mosses chalet who dies in Guatemala, the chalet is according to the Mosses.
• All real estate-related inheritances follow the law defined on JT 70 I 25.
• When defining furniture against act, the home is more important than just the last address available for the DC as all inheritors fall under act.

Defining the Last Address

• The last address was legally defined on JT 84 I 264, when the advisor of a lady moved all her papers one day before death.
• This was motivated by tax incentives, as Zoug was directly non-taxable but Sg wasn't, and the action was rejected on direct taxation.
• When there is a virtual double imposition, the true address of the de cujus falls to the Tax Court.
• The TC wants to know where the real and single address was in deciding whether the inheritor's call was admissible.
• The real address is proven with a web of elements linked to a spot and recognisable by third parties, civil documentation isn't enough.
• The EMS is also to be looked at. It was examined on arret RDAF 2008 II 481 where intra-communalities created doubling by canton.
• When someone lives in one district of VD, the EMS is to be considered as a last resort, and any care received means those benefits define their EMS ties
• This was used in an event where an individual let her appartment in one district and wasn't tied in any way other to the one where she was being cared for.

Territorial Issues

• Case 2001 II 521 showed territorial issues for de cujus between Ge and Vd due to a Collony house vs a staff on the Vaud EMS district where the later spent 8 Y before death.
• The TC looked at the case from the "maintainment" view in calling the house being set for parties meant ties to the location when possible.
• The cantons can act at any time. It is described on JT 1947 I 599 for Uri and Berne when last address is Uri, and farm rests on Berne plus other furniture there as well with ascendant plus brother sharing the goods.
• Ascendants are exonerated on Uri plus brother wasn't, but the Berne zone didn't exonerate anything from the estate tied to farmland on their area.
• Berne will tax both de cujus.
• A series of operation is set on the sharing and father+brother situation on arret, meaning the TC will follow this order in deciding if they feel it's unfair.
• The brother is forced to ask for 1/2 the succ to be exonerated, but it fails against all the asset share given with Uri stating total titles plus Berne area, must be taxed for furniture and real estate with address.
• Then the court had to choose whether it needs parts or if we need to look at situation before sharing, whether we tax co-inheritors or not.
• Co-Heritor sharing was also taken into consideration.
• All co-Heritors are equal to the RF so we needed a rule on equal shared ownership.

Private Asset Shares

• An undivided asset net part takes place until the asset are being shared, then the fiscal invoice is altered on parts so the father has 1/4 the shares so Ori reduces the same.
• We see enriched at the end of 1/2 the session pays taxes part-time Uri and the Berne farm. Ascendants usually exonerate the prior tax.
• The Berne zone didn't exonerate relatives from getting paid again if they inherited it.
• This decision was motivated for 2/4 Berne area on JT if we retain the solution plus on to fix up to be on.
• On would allow a double mix on shares if we take it by de cujus, one share with father exonerated
• This means better have 3/4 shares when solved for double IS. With this in mind, take things before part to find. Magouiller isn't right otherwise from shares and estate .
• JT will always enforce the before rule on testament.

Key Factors

• If the benefactor is on another corner, then the impots of the first canton count. However, the revenue will be from the receiving canton.

The Leg

• Legal elements on succession were RDAF 2006 II 501 for the all the DC located tessin woman, with testament nullified due to son sharing for estate. The testament got the wife due to donations to cousin,

• Wife will give to cousin a contract for donor equivalent the other children

• The office for Tessin will give cousin H of DC who's on tessin, the the cousin is taxed donation will happen in Nidwald but Not on Tessin since mama's gift is on Nidwald.

• The family needs a proper lawyer as these have to do everything on the first tax.

• Every carton can have the best argu pr tax , tessin being conflict, plus a donation

• The office had one of the kids due to a good process

• double imposition on same, or 2 parts for one. The case is for DC to get parts for free vs parts during death.

• That case gives court for 2 cart to pick , and will take Tessin leg

The capital

• An RDAF 2004 II 316 is a 100 k insurance case from LPP , the court can take the revenu or the IS depending if the child H will get IS and other things.

• One case showed two invoice at double the impots

• the court uses the revenue from article def to define notions for taxes , and makes sure not to tax again . revenu of foregone = revenu on IFLD 22

• We can get one last SI by taking domicile on act and if to a mobilier or not is needed for succession since he is H at time, will have the domain. this has one JP 1984 I 264. This wont apply.

• If sale for an, they are due on 21 IFLD

Asset Repartition

• Another element to consider then came up to make the system, after the the court would have to go 2/3 and 1/3 or some such situation , and as well on arret RDAF 2004 II 316 All the parts need to go on the assets though 3 of Cst, this has to be for 127 or less.

The Inheritance

• 25 a Has a table on assets. Was defined on 11 LCD.

Inherited assets

-The age with 32 table on estate or money on capital and 32 AI of assets.

Fiscal succession.

• Can be in 3 different forms where you still had shares back

The 4th way

• The main focus and direction from each corner is to set the the legal state. For all of this was a directive to use 41 LCD.

What is key?

• It the law Is to determine what is in place for this and how to act with the local courts
• To prevent the double billing situation that comes about based on this system