Beneficial ownership is a common legal instrument in Switzerland that allows a person, known as the beneficiary, to use the property of another person without actually owning it. This right allows the beneficiary to make full use of the property and to obtain the income from it, whether through renting, agricultural use or similar activities. However, the owner remains the legal owner of the property.
Legal basis of beneficial ownership in Switzerland
The legal basis for beneficial ownership in Switzerland can be found in the Swiss Civil Code (SCC). In particular, Art. 745 ff. SCC regulates the form and scope of beneficial ownership. According to Art. 745 para. 1 SCC, the beneficiary has the right to use the object to the same extent as an owner, but the substance of the object must not be impaired.
However, the beneficial ownership contract is subject to certain formal requirements. A distinction is made here between immovable and movable property:
Immovable property: Anyone who wishes to conclude a beneficial ownership contract for an immovable property must do so in writing and have it publicly certified. This means that the contract must be concluded before a notary.
Movable property: For movable property, a simple written form is sufficient. No public notarisation is required. Nevertheless, it is advisable to record the agreement clearly and in detail.
Tax treatment of beneficial ownership
In Swiss tax law, usufruct plays an important role, particularly in the taxation of wealth and income. The beneficiary is generally liable for tax on the income arising from the usufruct. This means that the beneficiary must declare the income generated from the use of the asset in his or her tax return. On the other hand, the owner is not generally liable for tax on this income, as he or she does not derive any direct benefit from it.
The situation is similar for wealth taxation. As a rule, the beneficiary is liable for tax on the assets. However, it is recommended that both the beneficiary and the owner declare the asset. However, the owner can value the asset at 0 in the tax return, while the beneficiary declares the full tax value.
Conclusion
In summary, beneficial ownership in Switzerland is a flexible and useful instrument that applies in a variety of legal and economic contexts. It allows individuals to derive the benefit of an asset without transferring ownership of it, which can be particularly advantageous in family or corporate structures. However, it is important to carefully consider the legal and tax implications in order to avoid unexpected obligations.
