In its judgment 9C_463/2025 vom 17. Juni 2026, the Federal Supreme Court had to assess a case at the intersection of business succession, inheritance law and income tax. At the center stood the question of whether the transfer of shares worth more than CHF 8 million to a long-standing managing director on the basis of an inheritance agreement is subject not only to inheritance tax but also to income tax, which the Administrative Court of the Canton of Aargau denied. The Federal Supreme Court held that this assessment was, in any event, not arbitrary and dismissed the appeal of the cantonal tax administration.
I. BACKGROUND AND FACTS
The decision was based on the activity of A.A. for C. AG in the years 1991 to 2020, during which he acted as managing director, delegate of the board of directors and chairman of the board of directors. From 1999 until her death at the end of 2016, D. was the sole shareholder of C. AG and had no direct descendants.
In 2001, A.A. and D. concluded an agreement on the purchase of 585 registered shares at a deferred purchase price of CHF 1'392'300 as well as a publicly notarized inheritance agreement. It was recorded therein that all shares still owned by D. at the time of her death were to be transferred to A.A. At the same time, the inheritance agreement provided that the deferred purchase price for the shares would be waived.
Following the death of the testator, the Canton of Zurich levied inheritance tax of approximately CHF 3 million on the transfer of the shares in June 2019. The corresponding tax assessment was not challenged. A few months later, the municipality of residence of A.A. in the Canton of Aargau qualified the same share transfer as taxable income in the amount of approximately CHF 8.3 million and levied income tax thereon. Against this assessment, A.A. pursued the appeal process up to the Administrative Court of the Canton of Aargau, which followed his reasoning and did not qualify the transfer of the shares as a transaction subject to income tax. Against this assessment, the Cantonal Tax Administration of Aargau as well as the municipality of residence of A.A. lodged an appeal [1] with the Federal Supreme Court (“FSC”).
II. QUESTIONS OF DELIMITATION – AN OVERVIEW
A. Employee Shares as Employment Income
Employee shares are participations in the employer or in a company closely related to it which are granted to the employee on the basis of his employment relationship. Subject to income tax (and to social security contributions) is the difference between the market value and any acquisition price at the time of acquisition. In the case of blocked employee shares, the reduction in value resulting from the restriction on disposal is taken into account by way of a discount.
In addition to employee shares, the concept of employee participation also covers options and expectancies. These are in principle taxed only at the time of exercise or of accrual, with the result that, in the case of deferred acquisition rights, the tax base grows – in principle – along with the value of the company.
B. The Legacy as a Possible Alternative
The transfer of assets by way of inheritance, legacy or gift is subject neither to income tax nor to social security contributions. By means of a legacy, the testator confers an asset advantage on a beneficiary without appointing him as an heir. As in the case of a gift, the grant is made without consideration. Depending on the degree of relationship, the inheritance, the legacy or the gift may be subject to inheritance or gift tax.
Whether qualification as an employee participation or as an inheritance, legacy or gift is more favorable from a tax perspective must be examined in each individual case. Alongside the tariffs, which diverge considerably between the cantons – and which, in the case of succession outside the family by way of inheritance, legacy or gift, may reach up to 36 %, as in the Canton of Zurich – particular regard must be had to the special provisions on business succession which currently fourteen cantons provide for. These rules regularly also cover inheritance tax. Their practical significance lies precisely in succession outside the family, since direct descendants are in any event exempt from the tax in almost all cantons. The aforementioned special provisions provide for reductions of inheritance or gift tax of between 50% and 80%. [2] Some cantons even grant a full exemption. [3]
These reductions or exemptions are, however, subject to the actual continuation of the business. The cantons make the relief conditional on a blocking period of typically five or ten years, throughout which the requirements – in particular the recipient's management position and the minimum shareholding of between 20 % and 51 %, depending on the canton – must continue to be met. If the period is not observed, the relief is subject to full or partial retrospective taxation, regardless of whether the recipient discontinues the business voluntarily or is forced to give it up.
C. The Reason for the Grant as a Criterion of Delimitation
According to case law, grants by third parties which have a close connection to an employment relationship do not necessarily constitute taxable income. [4] The FSC illustrates this with two examples: tips are not necessarily employment income despite an obvious connection to the employment relationship, and a collection of money by work colleagues on the occasion of an employee's departure is as a rule likely to constitute a gift. Even a grant by the employer is not excluded. In such a case, however, the character of remuneration must recede into the background.
Conversely, the absence of a contractual obligation to make the grant is not harmful: Long-service and anniversary gifts are also considered income from employment, even though there is no legal entitlement to them under the employment contract. The long-service gift does not compensate the work performed, but loyalty, and is therefore precisely not a gratuitous grant. Voluntariness is thus not a suitable criterion of delimitation; decisive is solely the economic, or deeper, reason for the grant.
III. THE ASSESSMENT IN THE CASE AT HAND
In the case at hand, the Administrative Court of the Canton of Aargau saw the deeper reason for the share transfer in the arrangement of the business succession and not in the compensation of the work performed. This was supported in particular by the fact that the transfer ultimately encompassed the entire company. In this context, the lower court held that, where more than 50 % of the voting rights are transferred, it must regularly be assumed that an orderly business succession constitutes the underlying motive for the grant. The FSC considered this assessment not to be arbitrary.
On the merits, the FSC considered that remuneration granted in addition to salary in the form of the entire company, which by its very nature can occur only once, appears extraordinary. Furthermore, the share transfer had not been dependent on the continuation of the employment relationship. Nor could the gratuitous nature of the grant, on its own, establish a sufficient connection to the employment relationship, since it corresponds precisely to the essence of a legacy. It was also of weight that there were no direct descendants or other heirs suitable for managing the company. It is true that A.A. came to be within the circle of potential successors in the first place on account of his long-standing activity for the company. However, this circumstance is of merely subordinate significance. Decisive in the FSC's assessment was therefore ultimately that, upon appraisal of the overall circumstances, the actual reason for the share transfer lay in securing the business succession.
IV. CONCLUSION AND GUIDANCE FOR PRACTICE
It follows from the judgment of the FSC presented above that not just any connection to the employment relationship suffices for an employee participation to be present. Rather, the employment relationship must constitute the actual economic reason for the share transfer. Decisive is therefore which motives underlie the transfer and whether these are predominantly rooted in the employment relationship or in a legal ground independent thereof, such as the securing of the business succession. It should be noted that the assessment of the FSC related to a question of fact, with the result that the court was limited to a mere review for arbitrariness.
Für die Gestaltungspraxis ergeben sich folgende Hinweise
- Examination of the tax framework: Once a decision on the transfer of the company has been taken, the tax consequences under income tax as well as under inheritance and gift tax must be determined. The result should be appropriately taken into account in the concrete structuring of the business succession.
- Clearly document the succession motive: It should be unambiguously recorded whether the transfer of the participation serves to arrange the business succession or whether it is to be qualified economically as remuneration for the employment relationship or for the work performed. The motive should then also be clearly discernible in the economic structuring of the transfer.
- No link to the continuation of the employment relationship: Conditions of continued employment, forfeiture and retransfer clauses are the classic features of an employee participation. Every such tie is purchased at the price of tax risk. In the case assessed they were absent – and this was one of the decisive indications.
- Review the cantonal succession relief provisions early in third-party successions: The exemption for close relatives does not apply here – which is precisely why this is the main field of application for the relief provisions available in fourteen cantons. The applicable law is that of the canton in which the deceased or donor was resident. The conditions – an active business operation, a management position held by the recipient, and a minimum shareholding of 20 % to 51 % – must be met at the time of transfer and can be prepared accordingly.
- Obtain and review a ruling at an early stage: In the case of succession outside the family with a connection to an existing employment relationship, it is advisable to secure the tax qualification of the planned transfer at an early stage by means of a tax ruling. In particular, it should be examined whether the concrete structuring and documentation sufficiently clearly evidence the transfer motive.
[1] Auf die Beschwerde der Wohngemeinde trat das Bundesgericht mangels Legitimation nicht ein (vgl. Urteil BGer 9C_464/2025 vom 17. Juni 2026, E. 1.3.4).
[2] Dies gilt für die Kantone Appenzell Ausserrhoden, Zürich, Waadt, St. Gallen, Tessin, Basel-Landschaft, Thurgau, und Graubünden, Glarus.
[3] So namentlich die Kantone Jura, Nidwalden, Bern, Freiburg und Solothurn.
[4] Vgl. hierzu und zum Folgenden: Urteile BGer 2C_703/2017 vom 15. März 2019 und 9C_604/2022 vom 1. Mai 2024.
