Gifts - current tax stumbling blocks

Case 1: Gift of a business debt

1.1 Facts of the case

Max and Erika Muster run a restaurant in Herisau, Canton Appenzell Ausserrhoden, as a partnership. The spouses and Max's mother live in Herisau. 

To finance the business activities, Max's mother granted the couple a loan of CHF 100,000 in 2018. This loan was reported as a business debt in the partnership's accounts.

At the end of 2024, the mother/mother-in-law waives repayment. 

1.2 Questions

• How does the waiver of repayment qualify for tax purposes?
• What are the tax consequences of waiving the repayment?

Case 2: Favorable hotel purchase or mixed gift?

2.1 The facts of the case

Mr. and Mrs. Muster acquired the Hotel Regina in Wengen from Zurich-based See-Immobilien AG for CHF 4 million under a purchase agreement dated December 29, 2006. At the time of the negotiations, the situation in the hotel sector was tense and the property was also in serious need of renovation. There were no other potential buyers.

As the official value of the property was CHF 4.6 million, the Bernese tax authorities initially demanded a gift tax notification for the difference of CHF 0.6 million. A market value appraisal subsequently obtained by the Bernese tax authorities even estimated the value of the property at a market value of CHF 6.2 million. 

2.2 Questions

• Is this a taxable gift?
• Let's assume there is a gift: How is it taxed in the canton of Berne?
• How should the case be assessed if the spouses are the shareholders of See-Immobilien AG?

Case 3: Will to make a gift for cohabiting couples 

3.1 Facts of the case

In November 2019, Max Muster transfers a property in the canton of Baselland worth CHF 1.55 million to his son Markus and his long-term (more than five years) cohabiting partner Martina, each with half co-ownership, by means of a purchase and gift agreement. CHF 550,000 of the transfer value is paid, CHF 275,000 each by Markus and Martina. CHF 1 million is waived for the son as an advance inheritance. 

There is no written agreement between the cohabiting partners from 2019 in connection with this transaction. Neither a gift nor a loan is mentioned in the tax returns of the cohabiting partners. Only in October 2021 do the cohabiting partners record in writing that Martina should pay CHF 500,000 to Markus in the event of the dissolution of the cohabitation. 

3.2 Question

How is the transfer to be treated for gift tax purposes?

Case 4: Anticipation of succession with usufruct 

4.1 Facts of the case

Max Muster is a wealthy widower living in Zurich. In view of the vote on the federal popular initiative "For a social climate policy - fairly financed by taxes (Initiative for a future)" ("JUSO Initiative") on November 30, 2025, he would like to transfer two properties to his two children as a partial anticipation of future succession - subject to a life-long usufruct:

• Max Muster lives in a villa near the lake in Zurich (tax value: CHF 5 million, market value CHF 15 million). The capital value of the usufruct amounts to CHF 2 million. 
• He also owns an apartment building in Freienbach (Canton of Schwyz) as an investment property (tax value: CHF 5 million, market value CHF 7 million). The capital value of the usufruct amounts to CHF 3 million. 

The children have not yet decided how they want to divide the two properties between them after their father's death. The family therefore agrees that the properties should be transferred to both children. 

4.2 Questions

• Does the transfer result in gift and/or property gains tax?
• Does it make a difference for tax purposes whether the children take over the property in joint ownership or in co-ownership?
• What are the tax consequences if a reversion clause is agreed?
• How are the transferred properties taxed for income and wealth tax purposes with regard to the reservation of usufruct?
• Do the tax consequences change if the father retains a right of residence instead of a usufruct of the villa?

Case 5: Preferential rent 

5.1 Facts of the case

Erika Muster owns a detached house in the city of Lucerne. She has been renting it to her brother for years for an annual rent of CHF 20,000(variant: CHF 25,000). The imputed rental value in 2023 is CHF 45,000.

Erika Muster herself lives in a rented apartment, also in the city of Lucerne. 

In her 2023 tax return, Erika Muster declared a taxable income of CHF 100,000, which included the aforementioned rent less a 20% maintenance allowance.

5.2 Questions

• How are the facts to be assessed for income tax purposes?
• Are gift taxes due?
• What is the assessment if the tenant is not the brother, but the employee?

Case 6: Simulated chain gift 

6.1 Facts of the case

On May 23, 2025, Erika Muster transfers her apartment in Haus zur Rose in Sissach (canton of Basel-Landschaft) to her brother Max Muster free of charge. On the same day, Max Muster also transfers the apartment to his son Martin free of charge. Both contracts were concluded with the same notary. In both contracts, the contractual property was transferred retroactively as of May 2, 2012. The other contractual provisions are also identical in both contracts. 

6.2 Questions

• How are these transactions to be treated for gift tax purposes?
• Does it make a difference whether the notary has recommended the procedure to the parties, especially for tax reasons?
• How should the case be assessed if Erika Muster gives the apartment to her brother and he gives the apartment to his son in his will?

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Case 7: Taxation of insurance benefits 

7.1 Facts of the case

Max Muster lives with his cohabiting partner Erika in the canton of Aargau. He has three adult children from his now divorced marriage. The three children all live in Lucerne. He is seriously ill and will die soon.

Max Muster wants to provide for Erika during his lifetime. He gives her an annuity that is to run until her death.

7.2 Question

What are the tax consequences?

7.3 Variant

Max Muster passed away on December 31, 2024. After his death, the following insurance benefits were paid to the three children in equal shares:

1. Lump-sum benefit from the 2nd pillar (occupational benefit scheme)
2. Lump-sum benefit from pillar 3a (tied pension provision)
3. Capital benefit from a pure risk insurance policy (pillar 3b)
4. Capital benefit from a mixed life insurance policy (pillar 3b)
5. Return of premiums from old-age pension insurance
   (lump-sum benefit: CHF 300,000; CHF 265,000 single premium; CHF 35,000 surplus benefits; conclusion: 10.11.2021; pension start: 01.01.2028)

7.4 Question

Who has taxing jurisdiction and how are the above benefits taxed?