Switzerland trust tax and reporting

Residency and what it changes

Where you are resident, not where the trust is administered, decides which country taxes you and which authority may receive information about your accounts.

No matter where the trust is run, a settlor or beneficiary is bound by the tax rules of the country they live in. Those rules can touch trust income, gains or distributions, depending on the facts.

This page does not describe those rules. The result depends on your residence, domicile, assets and the way the trust is drafted, so the question goes to a tax adviser who knows both systems.

We can hand your adviser orderly records: the deed, the trustee accounts, the asset report and a list of distributions.

Keep three questions apart. Where is the trust run, which here means Switzerland? Where does each connected person live? Where are the assets? Some countries tax assets within their borders whoever holds them.

The three questions may lead to three different tax authorities. This is why the trustee requests tax residence details from each settlor, beneficiary and controlling person and brings them up to date over time.

CRS reporting

Under the CRS, financial institutions collect tax residence details and report account information to their own tax authority (source: OECD, Automatic exchange of information portal).

That authority shares it with the authority in the account holder’s country of residence.

Switzerland applies automatic exchange of financial account information. The legal basis for it took effect on 1 January 2017 (source: State Secretariat for International Finance, Automatic exchange of information).

Local filing rules and dates depend on where you are resident; your tax adviser confirms them for your case.

We request from every person connected with the trust the forms that each reporting regime needs, and we confirm with the local partner which regimes apply to your trust.

What the trustee reports and when

Settlors, beneficiaries and people who control the trust each give the trustee a self-certification form that states their tax residence.

Whether the trust reports itself depends on its structure and the way it is operated. In writing, the trustee and the local partner confirm what applies in your case.

Provided you consent, your tax adviser gets a copy of what was reported about you.

The trustee also files the evidence behind each report: self-certification forms, the date each was received, and the account information sent. These records answer any later question from an authority.

Feel free to ask what was reported at any time. When you and your adviser work from the same facts as we do, your declarations and an authority’s information are less likely to clash.

Reporting is not a tax. It is information exchange, which lets each tax authority check what it is owed under its own rules.

If your situation changes, let the trustee know. A move abroad, a new citizenship or a new tax identification number may change what is reported about you. We update the self-certification and keep the earlier one.

Your own tax position

Your personal tax is for your adviser, and countries differ. Ask the adviser these questions before you fund a trust:

• How does my country treat income and gains inside the trust?
• Are distributions to me, or to my family, taxed when they are paid?
• Do I owe tax or file a return when I transfer assets into the trust?
• Does any inheritance or gift tax rule apply to the assets I place in the trust?
• What must I file each year, and with which authority?

Take the draft deed and structure chart when you meet your adviser, and settle any question before signing. Note the answers and keep them with the deed, so every year draws on the same facts.

Sources and review dates

Sources and review dates are listed below.

The facts carry their source and date and are not tax advice; your tax adviser confirms how each applies to you.

The Switzerland cost breakdown explains what each charge covers.

Return to the overview of Switzerland trusts or read the features the law allows. The common questions page covers the practical points, and you can request a quote for Switzerland when you are ready.