The case

The Federal Supreme Court had to determine whether the 795 shares bequeathed to a long-standing managing director and member of the board of directors under an inheritance agreement constituted taxable income or a bequest. A further issue was whether the authorities concerned had standing to bring an appeal before the Federal Supreme Court.

Source: 9C_463/2025 and 9C_464/2025 – Judgment of 17 June 2026

The commentary

The Court stated that, even though there was a close economic connection between the transfer of the shares and the beneficiary’s employment with the company, this connection alone was insufficient to classify the transfer as taxable income. The decisive factor was the primary purpose of the transfer: The shares were transferred principally as part of a long-term succession plan for the company, given the absence of suitable direct heirs. The fact that the inheritance agreement had been concluded 15 years before the testator’s death, and that the bequest was not conditional upon the beneficiary still being employed by the company at the time of the testator’s death, further militated against classifying the transfer as remuneration for services rendered.

For this reason the Federal Supreme Court confirmed that the transfer constituted a bequest and was not subject to income tax under the applicable tax law. The appeal brought by the Aargau Cantonal Tax Office was dismissed, while the appeal lodged by the municipality was declared inadmissible for lack of standing to appeal.