Death knows no borders. When heirs are domiciled in two countries, when assets are divided between France and Switzerland, or when civil regimes differ, succession can become a complex operation, subject to interpretation and even litigation. Preparing for a cross-border transfer requires a rigorous approach, integrating civil law rules, local tax particularities and the effects of bilateral agreements. It’s not just a question of passing on the property, but also of doing so clearly, without friction, and with respect for the wishes of the person making the transfer.
Anticipating conflicts between civil rules
When it comes to inheritance, France applies the principle of hereditary reserve, which imposes a minimum share on heirs in the direct line. Switzerland, on the other hand, allows greater freedom of disposal. This discrepancy can create tension when the deceased resided in one country but held assets in the other, or when his heirs are established on both sides of the border.
Since European Regulation no. 650/2012 came into force, anyone can designate the law applicable to their succession in their will, based on their place of residence or nationality. This choice of law is often overlooked, even though it is a structuring lever in an international succession.
In addition, certain asset structures frequently used in France, such as non-trading property companies and life insurance policies, may not produce the same civil and inheritance effects when an heir is domiciled in Switzerland. It is therefore essential to analyze the interaction of national rules and ensure overall consistency.
Managing cross-border assets and applicable taxes
When assets are split between several jurisdictions, it is necessary to identify precisely which tax rules apply in each state. In France, inheritance tax is progressive and varies according to family relationship. In Switzerland, inheritance tax varies from canton to canton, often with total exemption for relatives in the direct line, but significant taxation in other cases.
Certain assets, such as real estate located in France, remain subject to taxation in the country where they are located. But to apply this agreement, correct declarations in both countries and rigorous coordination of amounts and declaration procedures are necessary.
Banking assets, securities, works of art and collectors’ items require special attention: their classification, place of safekeeping, value and method of ownership have a direct impact on their tax treatment.
Discreet, rigorous support
BERGEOT PAOLI Associés assists its clients in all stages of their Franco-Swiss estate planning. We intervene as soon as the assets concerned are identified, and make sure that the asset structure, the location of the property and the objectives of the investor are consistent. We also ensure coordination between notaries, banks, insurers and local advisors, so that each stage of the transfer is legally regulated, tax-secured and administratively smooth.
To find out how we combine civil and tax regulations to ensure a smooth transfer, we invite you to discover our expertise in cross-border wealth management.