General information regarding life assurance in Switzerland
In Switzerland there is no clear legal definition of what amounts to life assurance. Policyholders should seek independent tax advice from a local expert to determine if their policies are recognised as life assurance for tax purposes on Switzerland.
The following information applies to policies which are regarded as redeemable life assurance contracts in Switzerland
Premium taxation
Life assurance contracts offered by Swiss and foreign insurers, which are not regarded as exempt contracts*, will be subject to 2.5% premium tax on each premium paid.
* Exempt contracts are non-redeemable life policies, redeemable life policies with regular premiums, life occupational pensions or life assurance policies where the policyholder is not domiciled in Switzerland.
Full and partial surrender
Where regular premiums have been paid, surrender proceeds will be exempt for tax purposes.
Where a lump sum premium has been paid the surrender proceeds will be taxable unless the surrendered amount is for social security.
Inheritance tax and gift tax
Life assurance policies are exempt from inheritance and gift tax.
Trusts do not exist in Swiss law, however, foreign trusts are recognised through The Hague Convention regarding the Recognition of Trusts, which entered into force on 1 July 2007 together with supplemental legislation.
It is unclear how trusts will be taxed in Switzerland and therefore specialist advice should be considered when creating or making a gift into trust.
The information provided in this article is not intended to offer advice. It is based on Skandia's interpretation of the relevant law and is correct at the time of publication unless otherwise stated. While we believe this interpretation to be correct, we cannot guarantee it. Skandia cannot accept any responsibility for any action taken or refrained from being taken as a result of the information contained in this article.