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Ruth Bloch-Riemer

Tax pitfalls in estate planning


Workshop by Ruth Bloch-Riemer on the occasion of the ISIS) seminar on 26 November 2020 entitled "Erbvorbezug, Erbgang, Erbteilung und Willensvollstreckung im Steuerrecht".

The complete seminar folder can be ordered for CHF
The corresponding case solutions can be purchased for CHF
(introductory price)
can be purchased in the shop.
The workshops are also available individually in the "Documents" section.
The case solutions and other documents can be obtained free of charge in the shop.

Case 1 - Family business in a joint-stock company


Architect Angelo founded his own company in 1990 in the form of a sole proprietorship. Angelo is married to Berta, with whom he has two children born during the marriage: Clara and Dario. In the following years, Angelo has built up his business with the funds earned during the marriage. In 2000, Angelo converted his company into a joint-stock company, of which he is the sole shareholder, sole member of the board of directors and salaried managing director. The company is not listed on the stock exchange. In view of his retirement and the company succession, Angelo would like his daughter Clara to take over the family limited company completely on 1 January 2021. Clara is suitable for this, as she already has the necessary work experience. She has resigned from her current job as a salaried architect as of 1 January 2021 and will continue to run the family limited company as sole shareholder and salaried managing director from then on.

Question 1 - Transfer of shares to Clara

1.1 Living Allowance

Angelo would like to structure this business takeover from Clara as a gift. What civil and tax law issues/catch-22s should be considered for him and Clara?

1.2. disposition of property on death

Angelo does not want to give away the family limited company to Clara as early as 1 January 2021, but instead names Clara as the sole heir of the family limited company in his will. What happens in the event of death if

1.2.1. the basic facts are assumed?
1.2.2 Deviating from the basic facts, Angelo and Berta are not married but live in cohabitation and Clara and Dario are from Berta's first marriage and Angelo is not the father of the children?

Question 2 - Inclusion of Dario

Angelo wonders how he can also include Dario in his estate planning by means of a testamentary disposition. What are the possibilities and what has to be considered from the point of view of inheritance and tax law?

Question 3

How could A transfer his office if it had not been restructured into an AG but remained a sole proprietorship?

Case 2 - Real estate


The married couple Albert and Bernadette Oro have become very rich through trading in real estate. They both have a 50% share in Oro AG, whose purpose is the purchase and sale of real estate. Albert and Bernadette are also the only members of the board of directors and independent managing directors of Oro AG.
Mr. and Mrs. Oro and their children Carlo (25 yrs), Dora (20 yrs) and Eva (18 yrs) live together in their villa in Zurich, where they live. They purchased the villa 15 years ago for CHF 6 million. Today the market value of the villa is at least CHF 8 million. As holiday homes, Mr. and Mrs. Oro also own a flat in Vevey and Albert inherited a chalet in Davos from his parents. All three properties are acquired with mortgages.
As part of their estate planning, Mr and Mrs Oro are considering transferring their properties to their children now, i.e. during their lifetime, as follows: Dora is to receive the property in Vaud, Eva the chalet in Davos and Carlo the villa in Zurich. Dora and Eva do not have to pay their parents anything in return. However, the transfer of ownership of the villa to Carlo is linked to the condition that he leaves the usufruct to his parents for the rest of their lives.

Question 1 - Transfer of the real estate to the children during their lifetime

What are the tax consequences for Mr. and Mrs. Oro and the children?

Question 2 - Financial shortage for Mr. and Mrs. Oro

5 years after the transfer of the holiday homes to Dora and Eva, the Oro family is no longer doing so well financially. They still all live together in the villa in Zurich, but they are thinking about how they can improve their financial situation

Question 3 - Disposal of Oro AG

What tax consequences are triggered if the Oros sell their Oro AG a) to third parties or b) to their children?

Case 3 - International estate Facts of the case

Andrew is a self-employed actor. He has a connection to four countries:
- England: He grew up in London (UK) and has spent a large part of his life there. He owns properties and bank accounts there.
- Germany: Andrew is married to Brigitte, who lives in Germany and with whom he regularly spends time in their shared property when he is not abroad on business. In addition to the property, Andrew also has bank accounts there.
- USA: Andrew's cousin Cindy, who is very close to him, has emigrated there. He visits her from time to time.
- Switzerland: Andrew owns a large flat, bank accounts and shares in Zurich. In addition, a good friend, an art dealer, keeps Andrew's art collection in a gallery there.

Andrew is now at an advanced age and is thinking about his estate planning and how to optimise the tax situation. In recent years, Andrew has filed tax returns in Zurich. Cindy and Brigitte are the only subsequent legal heirs.

Question 1

From a tax perspective, is it more advisable to transfer certain assets to Cindy or Brigitte during their lifetime, or to do so only by means of a will of death?


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