Key points and consequences
- No change to cantonal tax regimes: With the rejection of the initiative, inheritance and gift taxation remains under cantonal jurisdiction. Most cantons continue to exempt spouses and direct descendants from inheritance and gift taxes, preserving Switzerland’s competitive and predictable tax environment for families and entrepreneurs.
- Retroactivity concerns removed: The initiative’s controversial retroactivity clause, which aimed to prevent preemptive emigration and tax planning, is now moot. The Federal Council had already clarified that any anti-avoidance measures could not be applied retroactively to the date of the vote, reaffirming the principle of legal certainty for Swiss taxpayers.
- Lump-sum taxation remains available: Lump-sum taxation (Pauschalbesteuerung) continues to be available in 21 of the 26 cantons. As other countries have tightened or abolished their lump-sum regimes, Switzerland’s system stands out as an attractive alternative for new residents.
- Very competitive ordinary tax rates and tax-free capital gains: In addition to special regimes, Switzerland offers some of the lowest ordinary tax rates in Europe. In certain cantons and municipalities, top personal income tax rates are as low as approximately 19.6%, and corporate income tax rates can be as low as 11.3%. Notably, private capital gains remain entirely tax-free for individuals as before, unaffected by recent debates. This unique combination of very low tax rates and the continued exemption of capital gains from taxation makes Switzerland highly attractive for both HNWIs and UHNWIs, even under the ordinary tax regime.
- Legal certainty and international attractiveness: The outcome of this and previous referenda demonstrates the resilience of the Swiss model and the country’s commitment to legal certainty. Recent reforms to Swiss international succession law (effective 1 January 2025) further enhance flexibility and legal security for cross-border estate planning.
- Switzerland’s global standing: Switzerland was recently ranked as the world’s most secure and resilient investment destination, reflecting its strong governance, innovation capacity and tax competitiveness.
Comparison: US federal estate and gift tax reform 2025
For context, the US enacted the One Big Beautiful Bill Act in July 2025, introducing significant and permanent changes to the federal estate and gift tax regime. As of 2025, US citizens and domiciliaries benefit from a lifetime exemption of USD 13,990,000 for federal estate and gift taxes. This exemption will increase to USD 15 million per individual and USD 30 million for married couples as of 1 January 2026, with further adjustments for inflation from 2027 onward.
Accordingly, US citizens and domiciliaries may transfer assets up to these thresholds — either during their lifetime or upon death — free of US federal transfer tax. In addition, transfers to a spouse who is a US citizen remain entirely exempt from federal estate and gift tax.
However, individual US states may impose their own estate or gift taxes, subject to local exemptions. In contrast, non-US citizens who are not domiciled in the US are generally only entitled to a federal exemption of USD 60,000 on transfers of specifically defined US-situs assets, with the scope of assets differing between gifts and bequests. A higher exemption may be available under an applicable US estate or gift tax treaty, such as the treaty between the US and Switzerland.
Conclusion
The rejection of the “Initiative for the Future” confirms Switzerland’s ongoing commitment to a stable, competitive and predictable tax environment. With robust cantonal autonomy, continued availability of lump-sum taxation, no taxation of individuals’ capital gains and no federal inheritance tax on the horizon, Switzerland remains one of the world’s most attractive locations for HNWIs and UHNWIs.
For further information or tailored advice, please contact your usual Baker McKenzie adviser.
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