French-Swiss inheritance from the perspective of inheritance taxes

The Convention between the Swiss Confederation and the French Republic for the Avoidance of Double Taxation with respect to Inheritance Taxes was terminated effective 31 December 2014. Therefore, no tax treaty applies.

The first step is to examine the domestic tax law of the states concerned to determine their tax jurisdiction. As a basis for their tax jurisdiction, the states have tax liability factors, such as:

• the last domicile of the deceased,
• the domicile of the heir/legatee,
• the place of commencement of the succession process,
• the nationality of the deceased; or
• the location of the estate assets.

Subsequently, if one or more conflicts of jurisdiction arise in the first stage, rules to reduce or eliminate double taxation will need to be considered.

Example: France and Canton of Vaud

Cases of double taxation may arise due to the application, by France and the Canton of Vaud, of different taxation factors:

• the last domicile of the deceased is located in the canton, but one of the heirs is domiciled in France pursuant to Article 750 ter paragraph 3 of the French General Tax Code (CGI);
• the estate includes real estate in Switzerland, but the deceased’s last domicile was situated in France;
• the estate includes movable property in France, but the deceased's last domicile was located in Switzerland, and the same applies to his immovable property;
• the estate includes SCI shares in France and the deceased had his last domicile in Switzerland;
• the deceased receives a French pension but is domiciled in Switzerland.