Starting Position
The fictitious Mertens family stands for a typical situation of German tech entrepreneurs. In this scenario, the founder (52) has sold his Berlin software company to a strategic buyer; liquid assets after the exit are in an illustrative range of CHF 150–200 million. The family has lived in Berlin for more than 20 years; the two children (16, 19) attend an international school and university respectively.
In this scenario, the considerations are prompted by the wish for a calmer place to live and by possible changes to German inheritance and gift tax law. Typical questions the family would ask:
- Is lump-sum taxation (taxation based on expenditure) in the Canton of Zug an option – and under what conditions?
- Which family villa would suit as a home base in Switzerland – for example in Risch-Rotkreuz or Walchwil?
- Does a Liechtenstein foundation make sense for succession planning – and what would its tax consequences be?
- How can education and the transfer of wealth to the two children (16, 19) be planned ahead?
Typical Process in This Scenario (4 Phases)
Phase 1: Preparation in Berlin (Months 1–2)
- Preliminary review of lump-sum taxation in the Canton of Zug with a tax advisory firm in Zug (one requirement: no gainful employment in Switzerland; tax base to be agreed with the cantonal tax administration)
- Analysis of German exit taxation (§ 6 AStG) with a tax firm in Berlin – including whether payment in instalments is possible
- Preliminary review of a foundation solution with a fiduciary firm in Vaduz
- Search profile: Risch-Rotkreuz / Walchwil, illustrative range CHF 15–20M, lake view, villa with generous grounds
Phase 2: Property Search in the Zug Region (Months 2–4)
- Search for suitable properties – including outside public listings, where owners are discreetly willing to sell
- Viewings with the founder and his wife, ideally in different seasons
- Example target property: villa on a plateau in Risch-Rotkreuz overlooking Lake Zug (details fictitious)
- Discreet negotiation, e.g. via the seller's legal counsel
- Purchase price in this scenario: illustrative range CHF 15–20M, depending on location, condition and market
Phase 3: Acquisition and Structuring (Months 4–6)
- In this scenario a foundation could be set up – its design and the composition of the foundation board would be determined with specialists
- The ownership structure (private ownership or foundation) would need to be clarified in advance under Lex Koller with a law firm or the competent authority
- Lump-sum taxation would need to be agreed in advance with the Zug cantonal tax administration (tax base illustrative)
- German exit tax could be paid in instalments on application; conditions and collateral would need to be clarified with the tax advisers
- The family would then move its residence to the Zug region
Phase 4: Family Office and Next Generation (Months 6–9)
- A small single-family office in Zug could be considered, headed by a CIO with a private-banking background
- Education and wealth provisions for both children (amount and form illustrative)
- University or school in the Zurich/Zug region
- Optional: a charitable education foundation as part of the family's philanthropy
Possible Outcome in the Scenario (Illustrative)
Tax Considerations (Simplified Model Calculation, Not Tax or Legal Advice)
- Remaining in Germany: Ongoing investment income would remain subject to German taxation; the burden depends on returns and structure.
- Lump-sum taxation in Zug: With an illustrative tax base of CHF 600,000 and a simplified overall rate of approx. 40%, annual tax would be in the order of CHF 240,000.
- Comparison: Whether, and to what extent, a change of residence is advantageous can only be assessed through an individual calculation by specialists.
- Inheritance tax: Depending on its design and the beneficiaries' residence, a foundation can affect the inheritance-tax position; individual review by specialists is required.
Family Office Build-Up
- A small family office could consolidate wealth management; the founder's role would need careful delineation with regard to lump-sum taxation (no gainful employment in Switzerland)
- Education provisions and a later handover of responsibility would be planned for the children
- Regular review of the structure with the specialists involved
Quality of Life
- A villa in Risch-Rotkreuz could become the family anchor – with lake view and Alpine panorama
- Good transport links to Zurich, Lucerne and Zurich Airport
- Schools and universities in the Zug/Zurich region within reach
What the Scenario Shows
1. Plan early. A change of residence after an exit touches tax, inheritance and family questions at the same time. Switzerland can be attractive for families with DACH roots thanks to cultural proximity and schooling continuity.
2. Exit taxation comes first. German exit taxation under § 6 AStG can trigger significant amounts; options such as payment in instalments should be reviewed early with a tax adviser – ideally several months before departure.
3. Foundations are not automatic. Depending on its design, a Liechtenstein foundation can support succession planning; however, its tax effect in Germany and Switzerland depends heavily on the individual case and must be reviewed by specialists.
4. Zug as a location. Zug offers low tax rates, an international environment and good connections to Zurich. Whether lump-sum taxation is possible and sensible depends on personal circumstances.