Domicile in Switzerland

Switzerland may be a good location to retire.
In particular, there is a special tax status called Swiss Lump Sum Tax for persons with no professional activity in Switzerland. It is calculated on 5 times the rental value of the real estate owned or rented by the retired person. This amount is the basis to calculate the income tax which varies in each canton and in each commune. However, most cantons have introduced a minimum tax basis.
In September 2010, the Swiss Federal Council made a proposal to change the law: According its first draft, the lump sum tax should be calculated on the following basis:  Seven times the rental value, the minimum taxable income basis amounting 400k for Federal taxes. For the time being, the cantons are free to choose another minimum taxable income basis. For non-EU citizen, this basis is actually much higher. In case of change of law, it may be wise to move to Switzerland before this new law enters in force, since the old arrangements should still be applicable for the next five years after the new law enters in force.  In April 2011, The National Council rejected the proposal to forbid Lump Sum Tax (so-called "Saint Gall Initiative") by 92 voices against 61 voices. The Federal Conucil has to propose amendments to be discussed with the Association of Cantonal tax authorities. However, the political pressure remains to abrogate the lump sum taxl.  On the cantonal level,  popular votations in Zurich and recently (September 2011)  in Shaffhausen were in favour of the abrogation of the cantonal lump sum tax.,
Your tax adviser should calculate Ordinary tax versus Lump sum tax burden. Thus, in an increasing number of cases, the ordinary tax may be milder! This is due in particular to the high prices for real estate in Switzerland.
In both cases, there is no capital gain tax on private assets (with the exception of real estate). Furthermore, in most cantons the inheritance tax is often nul or very low for spouse and children. Thus, for your descendants, this tax may reach 6% in direct line for  lump sum taxpayers in Geneva, between 1,75% to 3,5% in Vaud depending on the commune your are domiciled and zero % in Valais).
The Lump Sum basis may increase when you add Swiss source income and foreign income (interests & dividends) at least in the cases you pretend to claim back the foreign withholding tax. The same holds true if you dispose of any further assets in Switzerland such as expensive cars, horses, painting collection etc.  Lastly, some countries obtained special anti-avoidance provisions in their tax treaty with Switzerland. 

Tax consideration should not be exclusive.
The main test is to know where you feel confortable: do you prefer a city near the airport or a mountain resort? An appartment or a villa with garden? An international city or a typical Swiss village?
The undersigned has accompanied dozens of persons to retire in Switzerland over many years. He did several conferences in London, Stockholm & Göteborg on this topic.
The administrative work includes in particular Real estate, health insurance, social cotisations,  importation of car, furniture or pets, administrative assistance for the B permit, banking statement and fixation of your lump sum tax.
The first step is to find the place where you feel happy. We may help you with suggestions and ideas. We are used to deal with the three main cantons choosed for retirement  (Valais, Vaud, Geneva) and are able to draw any comparisons between them.
Our fees are based on the effective time spent (CHF 400.- an hour). Thus, in ordinary cases, they should  not exceed CHF 6000.- (meeting with the tax administration, establishment permit, insurances, collaboration with your adviser in the departure country, and the case beeing, importation of goods, for example of cars or antiques).
 
Don't hesitate to contact me at kamber.arthur@bluewin.ch
or +41 76 365 1667

Arthur Kamber