Passing on assets

Swiss to vote on nation-wide inheritance tax

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Activists hand in signatures for the inheritance tax voteImage Caption:

Activists hand in signatures for the inheritance tax vote (Keystone)

A move for the imposition of a national inheritance tax on legacies of more than SFr2 million ($2.2 million) has received enough support to be put to a nationwide vote. The initiators handed in the requisite number of signatures on Friday.

More than 111,000 people - well over the 100,000 necessary - had signed the initiative, which is backed by a coalition made up of the Social Democratic Party, the Greens, the Evangelical Party and trade unions.
 
Supporters say the tax, to be levied at a rate of 20 per cent, will help to combat the increasing inequalities in tax levels.
 
“It’s fair to levy a tax when someone comes into wealth without having made an active contribution to creating it,“ said Barbara Gysi of the centre-left Social Democrat party, when the signatures were handed in to the Federal Chancellery.
 
Supporters of the initiative say Switzerland has the greatest concentration of wealth of all the countries of the Organization of Economic Co-operation and Development – a group of 34 developed and emerging countries. They say 2.6 per cent of the population own half of the wealth, and claim that current tax policies are shifting the burden from the rich to the middle classes.
 
With the barrier placed at SFr2 million, this will not affect the passing on of houses or other real estate, they say. Farms will be exempt, and the initiative includes measures to ease the transfer of family businesses.
 
The tax – which would also be levied on gifts of more than SFr20,000 per year received by any one individual – is supposed to bring in SFr3 billion a year, two thirds of which will be used to help finance the old age pension scheme. The other third will go to the cantons, to compensate them for the income they will lose as a result of the nation-wide tax.
 
The Home Owners‘ Association has come out fiercely against the initiative, saying the tax- free barrier is much too low and that it will be the middle classes who pay. It also says the initiative undermines cantonal autonomy.
 
The initiative had already triggered concern among many wealthy people after it was launched in August 2011: if passed, all assets passed on after January 1, 2012 will be affected. Lawyers reported that at the end of 2011, there was an upsurge of people passing on expensive houses and share portfolios to their heirs to beat the deadline.

 
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