Donation from grand parent

[Davidbrcz]

Hello

I’m expecting my first kid by mid summer, and my father (american citizen living in the US) would like to setup some long lasting fund for the kid.

What would be the best way to setup this. from a banking point of view (type of account, banks…) but also from a fiscal point of view (how are international donations from grand parents taxed here) ?

I’m aware of the complications that could arise if the account is the kid’s name (can’t do much without the bank approval, the kid gets it at 18 no matter what).

Any tips or feedback appreciated

[gaijin]

Complex topic, some first input:

@Davidbrcz

What would be the best way to setup this. from a banking point of view (type of account, banks…)

Two options:

IB Family Account
True Wealth Kids Account

@Davidbrcz

but also from a fiscal point of view (how are international donations from grand parents taxed here) ?

Most cantons don’t have inheritance tax, so Swiss authorities don’t tax these transactions.

[nabalzbhf]

@gaijin

Most cantons don’t have inheritance tax, so Swiss authorities don’t tax these transactions.

Swiss gift/inheritance tax only matters if the donor/deceased is domiciled in CH (which isn’t the case here). So even if there was no family link it would be untaxed by CH.

(No idea if there are US triggered taxes tho)

[gaijin]

@nabalzbhf

Swiss gift/inheritance tax only matters if the donor/deceased is domiciled in CH (which isn’t the case here). So even if there was no family link it would be untaxed by CH.

You’re right. The topic was also discussed here:

Gifts and tax declaration

[rez]

@gaijin

Most cantons don’t have inheritance tax

I don’t think so, while as @nabalzbhf mentioned in this case there may not be any Swiss tax liability because the donor lives abroad, in general 23 out of 26 cantons levy gift taxes and 24 out of 26 levy inheritance taxes

[Moustachienne]

@nabalzbhf

Swiss gift/inheritance tax only matters if the donor/deceased is domiciled in CH

This.
Within CH, no tax has to be paid by the receiving person, nor to the receiving canton or the state by the gifting person.

(If the gift were gifted from within Switzerland, the gifting person might have to pay taxes, if I recall correctly to their canton.)

You’ll need to check US rules, if taxes apply there.

[JEPG]

What’s right is that the tax is due in the donor’s canton.
Who pays it is up to the deal between the donor and the beneficiary.

What is due depends on two facts: how they’re related and what’s the (donor’s) kanton’s law about it and it varies A LOT between places. From tax-free to … much more.

[Moustachienne]

Apparently, the recipient is actually the one held responsible for paying the tax (if one has to be paid).