The $60'000 cap for US investments

I am not yet decided on this topic but i want to let you know i am following closely this discussion :wink:

That’s not really true though. It depends on which ETF; I have a one etf strategy so for me it vould be Vanguard Total World. In this case I would lose 15% of 50% of the total, which is the US part more or less. On top of that US doesn’t have treaties with all the countries so even an “total world” US fund lose some percent money on the ex-US part.
I think Ireland is one of the countries with the most favourable double income treatment, so probably in the end for a global world ETF it’s kind of a wash between US or IE based fund.

Instead for pure US ETF (like S&P500) then yes you get beack the whole 15 % and would probably make much more sense.

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If the ETF is purely or mostly US, US ETFs are better in most cases

However, do not underestimate these two points:
-Swiss brokers charge more to trade on US exchange than on the Swiss exchange.
-US ETF are traded in dollars, money need to be exchanged from CHF to $ which will cost between 0.9 to 2% depending on the broker

Swiss brokers charge more to trade on US exchange than on the Swiss exchange.

Swiss brokers charge more than anyone else in the world for anything.

-US ETF are traded in dollars, money need to be exchanged from CHF to $ which will cost between 0.9 to 2% depending on the broker

Ditch your current broker asap. IB charges practically a flat $2-3 per conversion for smaller amounts under $100k or so

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@hedgehog don’t worry I am moving. I have decided to have US investment with IB and keep Swissquote for emerging market

But I try to always give full info to offer the possibility to do run the numbers :wink:

To give another exemple, to have non-US ETFs with a US broker could be a “not so good idea” as dividends will be taxed at 15% which can be reimbursed by swiss tax authorities. However, you will have to wait few months to more than a year to be reimbursed.

so would you agree that the following describes the US estate tax situation correctly:
upon death, if you are a swiss citisen or resident,
below USD 60’000 of US-domiciled assets no taxes apply. Above 60k, the old Siwss-US-taxation treaty from 1952 kicks in: the tax-free limit is calcualated as
$5’230’000 * f
where f is the fraction of US domiciled assets of your total belongings.
Of your US-domiciled property, everything above the threashold is taxed roughly 40% (who knows?)

Example: if you are 100% in US domiciled stocks, you tax free threshold is $5.23M. if you have 20% of you assets in the US, it is $1.46M

Source NZZ
Source Deloitte
Source Credit Suisse


Interesting point, I haven’t seen before that they prorate the exemption like that

It’s a progressive tax, rates vary from 18 to 40% currently. Progression rises quickly, so you can safely assume that if it comes to this tax having to be paid, you next of kin will be ripped off mercilessly by the IRS to the full extent of US tax law

If you have a very significant estate and you want to leave it to your children/family without the IRS having too much to say about it, setting up a trust/private foundation might be a good idea :


Thanks nugget for aggregating these articles/documents.

Has anyone investigated setting up a Trust as suggested by Julianek? Anyone using one as a Trustee/Beneficiary? This might deserve its own thread.

So far I’ve found that the lawyer fees would be high and finding “trusted” trustees that will outlive you are not straightforward. But knowing that the passive income of an irrevocable trust could feed my heirs and their heirs without touching the principal would be the ultimate gift.

I am covered with a generous life insurance from my company so I don’t feel for now the need to hedge myself against the Estate Tax process (I am also well under the tax-free limit of $5M). If I leave my job one day, I would probably move my assets to Irish ETFs/Funds.

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I may be a bit late to the party but I’m also very interested in this topic. Especially I’m asking myself, if having any cash or any assets in a U.S. Broker account like IB (although I’m not even sure if it’s not U.K. in this case), is also affected by the US taxes?

In the linked old Swiss-US-taxation treaty from 1952 it sais something like the following “Nachlassteile” are taxed:

c. Bewegliche körperliche Sachen (mit Einschluss von Banknoten oder Papiergeld
und von anderen am Ausgabeort als gesetzliche Zahlungsmittel geltenden
Geldsorten), die im Zeitpunkt des Todes des Erblassers tatsächlich im
anderen Staate liegen, und
d. Sonstige Vermögenswerte, welche die zuständigen Behörden der beiden
Vertragsstaaten übereinstimmend als in diesem anderen Staate gelegen betrachten.

So if I’m with IB and own an Irish ETF with US Companies (like the S&P 500) - does it really exclude me from the US estate tax?

I’m not a lawyer, so take this with a grain of salt and a waiver of liability. As far I know non-US-domiciled funds generally are not considered US situs assets.

Here’s a private IRS ruling with some analysis: The key moments are these:

  • For corporations only shares of domestic U.S. corporations are considered U.S. situs assets - USC 2104(a).
  • It matters however whether your fund is considerer a corporation for U.S. tax purposes and not a trust - CFR 301.7701-1 to 301.7701-4. But AFAIK this should be normally the case.

Oh, btw note cash held at a U.S. broker is U.S. situs asset (debt obligation, 2104c), but not cash at a U.S. bank!


Thank you @hedgehog

How can it be that we all need to be wondering about this and there’s noone who can tell how this really is? I asked about 3 tax advisers in the region of Basel about this and all of them didn’t know and couldn’t/wouldn’t tell me who I could ask for a definitive answer.

I’m not really wondering per se. Holding US stocks and ETFs is fine by me, much much cheaper to trade and hold than any european fund. Sold all my irish etfs last year and not looking back. As we discussed in this thread, US estate tax for swiss residents is only really a threat when your net worth approaches $5+M (but keep in mind prorating rules we also discussed).

I gave your the answer, seems clear enough to me. The minor technical detail to confirm that your chosen fund is really not a trust in U.S. tax sense you can clarify with fund’s marketing people directly. Or talk to a U.S. tax consultant or accountant - if you have a million or two already you can easily afford at least a skype consultation. Don’t waste time on swiss - the few that I’ve seen are barely compenent even in swiss taxation except for routine cases and break already on DA-1, and people competent in both tax systems are endangered species. International taxation can get pretty complicated.


You are probably right. I have the same experience with swiss taxt consultants :unamused:

My net worth is not even close of approaching a $1M - I’m just the type of guy who likes to understand what he does and try to rely on professionals :slight_smile:


(My choice of ETF is VOO btw.)

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Hi, interesting thread. I chose to stick with the European ETFs because of the following reasons:

  • don’t trust USA
  • afraid of complex tax issues, which may change in future
  • afraid of estate tax
  • buying ETFs in CHF by a Swiss broker is easier (no transfers abroad, no fx)
  • don’t need to bother about tax reclamation
  • estate tax treaty works only for a couple of countries
  • I am a Swiss resident now, but who knows about the future
  • keep it simple as a long term solution

However, I cannot stay blind to advantages of investing in US directly:

  • lower fees with IB
  • lower TER and better choice of ETFs
  • ability to offset the withholding tax with my swiss taxes (is this really so easy and doable in every canton?)
  • when I compared annual return of VT and VWRD over the last 5 years, according to Bloomberg the difference is 0.5%, how can it be so big?

So you too went first for the Irish ones? Why did you do it in the first place? May I ask what ETFs did you use to hold and which ones you hold now?

Didnt really think of taxes at first, and then tried to play around with accumulating ETFs and wash selling them before the day X when fictional taxes are due. In the end decided it’s too much hassle, tax uncertainty and don’t bother with them now



VT has more small caps than VWRD. They don’t follow the same index. That’s one of the reason for the difference you see. You can see it here:

VT follows global all cap
VWRD follows All-World

and then you need to add the variability caused by:

  • securities lending
  • tracking error
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Could you please cite the sentence asserting that? Legalese is incomprehensible to me and I can not find it. Thank you

It’s only two pages and you’ve been already given the hint that the answer is there. You can do it, believe in yourself!

If not, I believe going rates for a job like this are 200-300 Fr/h


I guess the relevant part starts here:

Article III: In imposing the tax in the case of a decedent who at the time of death was not a citizen of the United States and was not domiciled therein, but who was at the time of his death a citizen of or domiciled in Switzerland, the United States shall allow a specific exemption which would be allowable under its law if the decedent had been domiciled in the United States in an amount not less than the proportion thereof which the value of the total property (both movable and immovable) subjected to its tax bears to the value of the total property (both movable and immovable) which would have been subjected to its tax if the decedent had been domiciled in the United States.

Legal bla-bla to layman terms translation

If you die and at the moment of death:

  • you are not a citizen of USA
  • and you are not living in USA
  • and you are a citizen of Switzerland
  • or you are living in Switzerland

Then you will pay as much tax, as if you have been domiciled in USA.

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