PPLI Blog | Insights on Tax, Estate Planning & Structuring

Switzerland Has No Capital Gains Tax — And a Lump-Sum Tax Regime That Makes PPLI Almost Free

For the right kind of high-net-worth client, Switzerland offers a PPLI planning environment unlike anywhere else in Europe. Here is why — and who it is for. Walk into any private banking conference in Geneva or Zurich and you will hear two received wisdoms about Switzerland and investment tax. The first: Switzerland has no capital gains tax. The second: Switzerland is an expensive place to be a taxpayer. Both are true, and understanding why they coexist — and how a specific structure makes them irrelevant simultaneously — is the key to unlocking Switzerland as a PPLI jurisdiction. The No-CGT Baseline — and Its Limitations Switzerland does not tax capital gains realised by private investors on securities portfolios. This is a

Your Portuguese Holiday Home Has an Inheritance Problem

You bought the Algarve villa for the lifestyle. The warmth, the coast, the golf course ten minutes away. At the time, the last thing on your mind was Portuguese inheritance law. It probably still is. Most non-resident property owners in Portugal give very little thought to what happens to the villa on death – until an adviser, a solicitor, or a family conversation forces the question. And when it does, the answer is often a surprise. The Inheritance Tax Portugal Does Not Have – and the One It Does Portugal abolished inheritance and gift tax for direct family members years ago. If you leave your Portuguese property to your children or your spouse, they inherit free of any Portuguese inheritance

Portugal Without NHR. Here’s What PPLI Does Now

If you moved to Portugal under the Non-Habitual Resident regime, or advised someone who did, you already know: NHR is gone. The Portuguese government closed the scheme to new applicants at the end of 2024. For those whose ten-year period has expired, there is nothing to replace it. The full IRS progressive scale — up to 48% — now applies. The new IFICI regime is not NHR in a different coat. It is a targeted incentive for qualifying tech workers, researchers, and specific investors. It is not available to retirees, passive investors, or most of the expat community that Portugal has attracted over the past decade. Advisers who present IFICI as a like-for-like replacement risk seriously misleading clients. So where

You Don’t Live in Germany. But German Inheritance Tax Might Find You

Your clients don’t live in Germany. They live in Dubai, London, Vienna, Singapore. They might never have set foot in a German tax office. And yet German inheritance tax could reach across borders and take up to 50% of what they leave behind. Here is why — and what PPLI can do about it. The Extraterritorial Reach of German Inheritance Tax Most advisers think of Germany as a market for German residents. That is understandable but incomplete. The German Erbschaft- und Schenkungsteuergesetz (ErbStG — Inheritance and Gift Tax Act) has extraterritorial reach in two ways that directly affect non-resident clients. First, German inheritance tax applies to the worldwide estate of any individual who was German-domiciled or German-resident at the time

Germany’s 12-Year PPLI Rule: The Most Underused Planning Tool in Europe

Germany is, simultaneously, the most complex and most rewarding Private Placement Life Insurance market in Europe. The 12-year half-income rule is real, it is material — and it is routinely overlooked by advisers who consider Germany too complex to touch. That calculation is wrong. Here is what you need to know. The Headline Benefit — And Why It Matters Germany imposes a flat Abgeltungsteuer of 25% (approximately 26.4% including the Solidarity Surcharge) on investment income: dividends, interest, and capital gains on securities held directly. For a client at Germany’s top marginal income tax rate of approximately 47.5%, the Abgeltungsteuer is already a meaningful advantage over direct income taxation. But PPLI offers something better. Under §20 Abs. 1 Nr. 6 of

South Africa: Estate Duty, the Named Beneficiary Rule and Life Insurance

South Africa’s estate duty framework has a clean structural parallel with the UK’s inheritance tax problem: a life insurance policy paid to the deceased’s estate is included in the dutiable estate; a policy paid directly to a named beneficiary is generally excluded. The solution is structural — not a trust, but a beneficiary designation. South African trust law is mature and well-developed, adding a further planning layer for UHNWI clients. GLOBAL ESTATE PLANNING SERIES Overview — The Global LandscapePart 2 — EU Civil Law: France, Germany, Spain and BelgiumPart 3 — The UAE and GCC: Succession Without Estate TaxPart 4 — Japan and Asia: The World’s Highest Inheritance Tax RatePart 5 — The United States: Estate Tax, the ILIT, and

The United States: Estate Tax, the ILIT, and Where PPLI Fits

The US federal estate tax applies at 40% on the taxable estate above the applicable exemption — currently at historically high levels but subject to a scheduled reduction. Life insurance owned by the deceased is included in the taxable estate unless held in an Irrevocable Life Insurance Trust. PPLI, as KPMG has noted, is “a potential option to increase one’s after-tax investment returns while providing for transition of assets upon death.” The US is the most sophisticated market globally for the intersection of PPLI and estate planning. GLOBAL ESTATE PLANNING SERIES Overview — The Global LandscapePart 2 — EU Civil Law: France, Germany, Spain and BelgiumPart 3 — The UAE and GCC: Succession Without Estate TaxPart 4 — Japan and

Japan and Asia: The World’s Highest Inheritance Tax Rate and the Life Insurance Exemption

Japan’s 55% maximum inheritance tax rate is the highest in the developed world. The Japanese legislature built a specific life insurance exemption into the Inheritance Tax Act — ¥5 million per statutory heir — as a deliberate policy tool. For UHNWI clients with Japanese connections, life insurance is not peripheral to estate planning. It is central to it. GLOBAL ESTATE PLANNING SERIESOverview — The Global LandscapePart 2 — EU Civil Law: France, Germany, Spain and BelgiumPart 3 — The UAE and GCC: Succession Without Estate TaxPart 4 — Japan and Asia: The World’s Highest Inheritance Tax Rate (You are here)Part 5 — The United States: Estate Tax, the ILIT, and Where PPLI FitsPart 6 — South Africa: Estate Duty and

The UAE and GCC: Life Insurance, Sharia Succession and the Forced Heirship Problem

The UAE imposes no inheritance tax, no estate duty, and no capital gains tax on death. The estate planning problem in the Gulf is not tax — it is who receives the assets. For the approximately 88.5% of the UAE population who are non-citizen expatriates, and for Muslim citizens subject to Sharia succession rules, life insurance is one of the most powerful tools available. Getting the structure right requires understanding what Sharia inheritance law actually mandates, and how DIFC, ADGM, and offshore structures interact with it. GLOBAL ESTATE PLANNING SERIESOverview — The Global LandscapePart 2 — EU Civil Law: France, Germany, Spain and BelgiumPart 3 — The UAE and GCC: Succession Without Estate Tax (You are here)Part 4 — Japan

EU Civil Law and Life Insurance: When a Trust Is Not the Answer

In the UK, a trust removes a life insurance policy from the estate and eliminates its Inheritance Tax exposure. In France, Germany, Spain, and Belgium — the four largest continental European UHNWI markets — the trust either does not exist in local law or is explicitly ignored for tax purposes. This piece examines what that means in practice and what tools actually work in each jurisdiction. GLOBAL ESTATE PLANNING SERIESOverview — The Global LandscapePart 2 — EU Civil Law: France, Germany, Spain and Belgium (You are here)Part 3 — The UAE and GCC: Succession Without Estate TaxPart 4 — Japan and Asia: The World’s Highest Inheritance Tax RatePart 5 — The United States: Estate Tax, the ILIT, and Where PPLI

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