Europe’s Changing Tax Environment and the Role of HNW Insurance – Asian Wealth Management and Asian Private Banking
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Europe’s Changing Tax Environment and the Role of HNW Insurance
A change of residence can alter the tax treatment of a family’s investments, insurance policies and succession arrangements. For high net worth (HNW) families moving between European countries, or arriving from the United States, the challenge is to coordinate those rules while preserving the ability to move again. The second panel at the Hubbis HNW Insurance Summit – Zurich 2026 examined where life insurance can contribute to that planning and what advisers need to understand before proposing a structure.
The discussion centred on the family’s circumstances, asset composition and likely next steps. Panellists considered Swiss ordinary and lump-sum taxation, continuing exposure to the departure country, and the interaction between insurance, trusts and other arrangements. Examples involving US taxpayers, German families and Nordic relocation showed why a solution needs to be assessed across jurisdictions and generations, rather than through the immediate tax position alone.
Chair:Oliver Muggli, Partner, 1291 Group
- Sandra Bento, Executive General Counsel, Baloise Life
- Louise Tamm Kinberg, Country Manager Sweden, WEALINS
- Natalie Dini, Partner, Tax Partner
- Florence Hediger, Partner and Certified Tax Expert, Zurich, MLL Legal
- Planning should begin with the whole family, including children and beneficiaries who remain in other countries. Their residence and future mobility can affect the suitability of an insurance arrangement.
- Swiss ordinary and lump-sum taxation require different analyses. For US taxpayers, treaty eligibility, continuing US exposure and the policy’s compliance with US rules add further complexity.
- Leaving a country does not necessarily end its taxing rights. German exit tax, continuing residence and inheritance or gift tax exposure need coordinated review before relocation or transfers.
- Portability must be designed and checked across the countries concerned. The beneficiary provisions, investment arrangements and tax treatment may need to adapt when the family moves again.
- Asset composition matters alongside tax residence. Illiquid holdings require suitable legal and custody arrangements, reliable valuations and confirmation that they can be accommodated within the policy.
- Insurance can work alongside trusts and other structures. The aim is a clear arrangement that meets investment and succession needs while allowing sufficient flexibility for the next generation.
Start With the Whole Family and Its Assets
Advisers on the panel described families arriving in Switzerland from Germany, the United States, the United Kingdom and the Middle East. Tax was part of the decision, alongside safety, security and the family’s wider preferences. The initial assessment involved understanding the family setup, the available Swiss tax regime and whether estate or inheritance planning needed attention. Product selection followed those questions.
A parent’s relocation does not mean that children or grandchildren will move too. Beneficiaries may remain in the original country, while other family members establish themselves elsewhere. “We have to consider all of these different tax residences when looking at a solution”, one panellist said. An arrangement needs to be assessed against that wider footprint, including the consequences of eventually paying benefits to someone in another jurisdiction.
Asset composition was equally important. Liquid portfolios, dividend-producing investments and illiquid holdings raise different structuring questions. One participant described a case involving a substantial art collection, where inclusion in a policy depended on an appropriate custody or legal arrangement and attention to valuation. “You need to have the right structure around it”, the panellist said. The example illustrated the work required to accommodate an unusual asset, rather than a standard feature available for every collection.
Swiss and US Tax Positions Need to Be Considered Together
The panel questioned how much value an insurance policy adds if it is assessed solely through the Swiss tax position. The answer changes with the client’s status, the applicable tax regime and the family’s plans. Ordinary taxation and lump-sum, or expenditure-based, taxation involve different assessments. A policy that offers limited immediate Swiss tax advantages may still have a role in succession or a later move, but that role needs to be established for the individual family.
An American client relocating to Switzerland provided a more complex example. US citizens generally remain subject to US tax on worldwide income after moving abroad. Swiss lump-sum taxation does not resolve that exposure. The panel also highlighted a treaty condition: Swiss residence for US–Swiss income tax treaty purposes requires ordinary Swiss income taxation of all US-source income. Asset ownership and income streams therefore need to be considered across both systems when evaluating the arrangement.
Insurance was raised as a possible component of US estate and investment planning, subject to the policy satisfying US requirements. A European policy does not automatically deliver US tax benefits or remove reporting obligations. For variable life insurance, diversification and investor-control restrictions are among the issues that matter. One participant described the work as “a complex situation when we are talking about US nationals”, including the position of beneficiaries who remain in the United States and the relevant state rules.
The discussion of foreign insurance assets under Swiss lump-sum taxation also required a distinction from ordinary taxation. Foreign status alone does not establish that a policy is excluded from the calculation. The control calculation, including income for which treaty relief is claimed, and cantonal treatment must be considered. The practical task is to understand the interaction of the rules before judging whether the proposed combination is useful.
Departure Planning Extends Beyond the Move Itself
For German families considering Switzerland, the panel emphasised planning before departure and cooperation with advisers in Germany. Exit tax was identified as a major issue, alongside estate planning and the question of whether the person had genuinely ceased to be German tax resident. These are separate exposures that can require different actions and timelines.
An available home in Germany can remain relevant to tax residence after a move. That does not create a general obligation to sell every German asset, but it does make the facts of the departure important. Inheritance and gift tax exposure can also continue in particular circumstances. The panel cautioned against assuming that arrival in Switzerland creates an immediate opportunity to transfer wealth to children free of the departure country’s rules.
Business interests can introduce further consequences in the destination country. A participant raised the possibility of Swiss social-security charges arising from interests in German partnership structures. The outcome depends on the legal form, the person’s circumstances and the applicable social-security rules. Reviewing those holdings alongside the tax position can reveal a cost that a family focused on relocation alone may overlook.
Portability Means Preparing for the Next Jurisdiction
The insurance discussion repeatedly returned to the client’s next move. A family may relocate to Switzerland without intending to remain permanently, then later consider Spain, Portugal, Italy or another country. “Mobility and portability are keywords for insurance”, one panellist said. The design needs to address the current position while identifying how beneficiary clauses and investment arrangements would work in plausible destinations.
Nordic experience illustrated that sequence. A participant described Norwegian clients considering Switzerland while leaving open a later move to Sweden, with the insurance arrangement prepared for adaptation. The tax outcome is conditional: Norwegian domestic tax residence can continue after departure, and treaty residence and the relevant wealth provisions need to be assessed. The example supported planning for successive moves; it did not establish one universally favourable route.
The value of a portable arrangement lies in its ability to accommodate the family’s plans under the rules of each country concerned. “Does the setup we have work for those jurisdictions?” was the question one panellist asked. Insurers and advisers cannot know every future destination or tax change, but they can identify likely moves, check recognition and treatment, and establish what would need to change before the family relocates.
Insurance Can Work Alongside Trusts and Other Structures
The panel discussed insurance as part of a wider arrangement that may already contain trusts, foundations or holding companies. A trust may serve as policyholder, while insurance provides an investment and succession component. The respective roles need to be understood: governance, ownership, investment management and the eventual transfer of wealth do not all have to be addressed by the same instrument.
Participants also explored how real estate and other holdings might be accommodated through appropriate legal structures, subject to the insurer’s requirements and the client’s circumstances. Luxembourg’s segregation of policy assets and Triangle of Security were highlighted as relevant protections. Those features concern the safeguarding of policy assets and policyholder claims; they do not guarantee the investment performance of the holdings included.
Portugal was used as an example of a market where beneficiary arrangements and client involvement in investments can offer flexibility within the applicable framework. That degree of involvement is not a universal feature of insurance planning. It must be assessed against the destination-country rules and any other tax requirements that continue to apply, particularly for US taxpayers. The investment strategy and legal structure need to be developed together.
Flexibility Must Extend to the Next Generation
The closing remarks focused on the gap between planning for the current owner and planning for the family that will inherit. “I see too many clients focusing on their own generation, not taking into account the next one”, one panellist said. Children may move to different countries or hold assets differently from their parents, so a structure needs to be tested against their circumstances as well as the founder’s immediate objectives.
That does not mean adding complexity to cover every theoretical possibility. “Don’t look into complex and complicated structures”, another participant said. The preference was for arrangements whose purpose and operation remain clear, with enough flexibility to adapt. Insurance may contribute to planning across generations, but the continuity of any particular policy depends on its terms, insured lives and ownership arrangements.
Preparation was the consistent message for advisers. Before a policy is signed or a family moves, the relevant specialists need a shared understanding of residence, assets, beneficiaries and likely future destinations. Those details determine what can be implemented now and what needs review later. The usefulness of the insurance arrangement rests on how well it fits that family plan as circumstances change.
Disclaimer: This article summarises a panel discussion and reflects information available as at 1 October 2026. It is for general information only and is not tax, legal, financial, investment or other professional advice or a recommendation. Its contents may not apply to individual circumstances, products or jurisdictions. Hubbis accepts no responsibility or liability for actions taken or omitted in reliance on it. Readers should obtain independent advice from qualified professionals before making any decision.
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