In-depth guide · Tax
Relocating a wealthy family: a checklist for Switzerland, Germany and Austria
Updated: · Leutrim Miftaraj, FLIORE · Editorial standards · Other languages: Deutsch · Français · Español
Short answer
A change of residence alters tax liability, applicable succession law, bank relationships and reporting duties all at once. Germany and Austria may tax unrealised gains in participations on departure, and Germany can apply extended taxation for ten years to people who move to low-tax countries. Banks must record new tax residences for the automatic exchange of information. Planning early avoids double taxation and gaps.
Four areas that change at the same time
For wealthy families, moving across a border is more than a change of address. It shifts tax liability from one state to another, can trigger an exit tax, changes the applicable succession law and requires adjustments at every bank and structure. The areas are connected: a move made too early can make a planned gift more expensive, and a forgotten residence can trigger double taxation.
Tax on departure at a glance
| Leaving | Exit taxation | Continuing effect | Note |
|---|---|---|---|
| Switzerland | No general exit tax on private assets | Tax liability ends on departure; withholding tax is treated as for a non-resident after departure | Cantonal assessment up to the date of departure |
| Germany | Unrealised gains in shares of corporations from 1 % (section 6 AStG); since 2022 payable in seven annual instalments on application | Extended unlimited tax liability for up to ten years when moving to a low-tax country (section 2 AStG); inheritance tax for five years for German nationals | Observe rules on returning |
| Austria | Exit taxation on capital assets | Under treaties and domestic law | Instalments or deferral possible within the EU/EEA |
Tax residence and dual residence
A person is tax-resident where they have their residence or habitual abode. If there are residences in two states, the double taxation treaty decides according to a fixed order: permanent home, centre of vital interests, habitual abode, nationality. Anyone who formally moves away but keeps family, house and business in the old country may well remain resident there. For people moving to Switzerland, taxation on the basis of expenditure (lump-sum taxation) may be an option under certain conditions – it requires, among other things, that no gainful activity is carried out in Switzerland.
Checklist before the move
- Tax advice in both countries: exit taxation, timing, dual residence, treaty.
- Align planned gifts, restructurings and sales with the timing of the move.
- Review succession law: in the EU, habitual residence determines the applicable succession law – adjust the will and any choice of law.
- Review structures: how will the holding company, foundation or trust be taxed in the new state of residence?
- Inform banks: new tax residence and self-certification for AEOI/CRS, and adjust services where needed.
- Adjust powers of attorney, insurance, health insurance and social security.
- Document deregistration, registration and the final tax assessment.
Worked example (simplified)
A German entrepreneur with 30 per cent of a GmbH plans to move to Switzerland. Her participation has gained considerably in value since it was founded. On departure, Germany would tax the unrealised gains; on application she can pay the tax in seven annual instalments. With her advisers she examines whether a planned gift of shares to her children before the move makes sense, adapts her will to the future law, informs her banks of her new tax residence and reports the move on time in both countries. As she remains a German national, she takes into account the five-year continuing effect for inheritance tax.
After the move
Most mistakes happen in the first year after a move: banks keep the old tax residence on file, withholding taxes are deducted at the wrong rate, reclaims lapse and tax returns in the old country are forgotten. A list of all accounts, structures, contracts and reporting duties with a status helps to make sure nothing is overlooked.
Structures and business participations
A change of residence becomes particularly complex when participations in businesses or structures are involved. A holding company that was unremarkable for tax purposes in the old state of residence can fall under controlled-foreign-company rules in the new state if it earns predominantly passive income. A family foundation may be treated as transparent in the new state of residence of the founder or beneficiaries, so that its income is suddenly attributed to those persons.
For business participations it must be checked whether the place of effective management of the company moves to another state when the managing director moves – with the consequence that the company becomes taxable there. For real estate, the right to tax generally remains with the state in which it is located. These questions must be clarified with advisers in both countries before the move, because some consequences cannot be corrected afterwards.
In FLIORE
FLIORE records residences, tax residences with TIN and nationalities per person, each with its period of validity. The AEOI/CRS pre-check shows where information is missing after a move; tasks and deadlines for banks, authorities and contracts can be managed in the compliance calendar.
At a glance
| Germany | Exit taxation from a 1 % participation (section 6 AStG), instalments over seven years |
|---|---|
| Continuing effect | Extended tax liability for up to ten years (section 2 AStG), inheritance tax for five years |
| Switzerland | No general exit tax on private assets |
Terms on this page
- Exit taxation (Germany)
- German taxation of unrealised gains on shares in corporations, from a holding of 1 percent, when a person moves their residence abroad (section 6 AStG).
- Tax residence
- The country in which a person is subject to unlimited tax liability because of residence, stay or other criteria.
- Family foundation
- A foundation whose purpose lies predominantly in the interest of one or more families.
Frequently asked questions
Does Switzerland levy an exit tax?
Not generally on the private assets of individuals. Tax liability ends on departure, and the assessment runs up to the date of departure.
What is extended unlimited tax liability?
German nationals who move to a low-tax country and keep substantial economic interests in Germany can remain subject to extended tax liability in Germany for up to ten years after leaving.
Does a move change succession law?
In the EU, the last habitual residence determines the applicable succession law unless a choice of law has been made. The will and any choice of law should therefore be reviewed before the move.
Must banks be informed?
Yes. For the automatic exchange of information, banks must know the current tax residence; after a move a new self-certification is required.
What happens to a family foundation when the founder moves?
Its tax treatment can change fundamentally in the new state of residence of the founder or beneficiaries. This must be examined before the move.
When should planning begin?
At least a year before the planned move, so that gifts, restructurings and deadlines can be aligned sensibly.
Can a company become taxable because its managing director moves?
Yes, if the place of effective management thereby shifts to another state. This can create an additional tax liability for the company and must be checked in advance.
Does real estate in the old country remain taxable there?
Generally yes: under the treaties, the right to tax real estate and its income usually lies with the state in which the property is located.
Sources
- German Foreign Tax Act (AStG), section 6 – taxation of increases in value
- German Foreign Tax Act (AStG), section 2 – extended tax liability
- Swiss Federal Tax Administration (FTA/ESTV)
- Austrian Federal Ministry of Finance (BMF)
- OECD – Model Tax Convention on Income and on Capital
- Regulation (EU) No 650/2012 (European Succession Regulation) – EUR-Lex
This page provides orientation and does not replace legal or tax advice. The cited legal sources in their applicable version are authoritative.
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