In a nutshell, the Swiss system is based on three levels of taxation: federal, cantonal, and municipal.

But in addition to this basic structure, residents are liable to pay some other taxes as well.

One of them is a wealth tax and anyone whose is resident in Switzerland for tax purposes is liable to pay it, both Swiss nationals and foreign residents.

As the name suggests, it is a tax levied on all your assets, both in Switzerland and abroad.

It is independent of your income, and is based only on the value of your assets. Market value will be used to determine how much certain assets are worth.

They include your bank accounts and investments, as well as the value of properties or real estate you may own in Switzerland and / or abroad. While your property in the UK or the US won’t be directly taxed in Switzerland it’s value will contribute to how much wealth tax you pay.

Other assets that you must pay this tax on are life insurances, the value of your vehicles, gold bullions, valuable art pieces, stamps, coins, and jewellery.

Basically, almost everything you own is taxable, though from a purely practical point of view, it would be difficult for the authorities to tax these smaller objects if you don’t declare them.

As somewhat of a paradox perhaps, even if your income is low (for instance, if you are retired and live only off your pension), but keep some cash in the bank for a ‘rainy day’, you will still owe the government money.

On the other hand, your furniture, house fixtures, clothing, books, sports equipment, electronics, cats, dogs, and other pets, are safe from the taxman, as are your contributions into the second and third pillars of your pension fund.

Additionally, you can deduct any debts you have from the wealth tax you owe.

What is your wealth tax burden?

As so many other things in Switzerland, the amount you will be charged is determined by your canton.

It is the highest in Geneva (1 percent) and lowest in Nidwalden (0.0665 percent), with other cantons falling somewhere in between.

Mostly, it is calculated on a progressive scale, that is, your tax burden will depend on the exact amount of your assets. The progressive scales vary between cantons and even between municipalities in the same canton.

Each canton has a different exemption limits for wealth tax. That means if the net value of assets is below this limit then no wealth tax has to be paid. 

In Zurich, for example, no wealth tax is levied on assets worth less than 77,000 francs.

Above that amount, you will owe  0.50 francs for each 1,000 francs extra. Starting from 308,000 francs you will owe 1 franc for each 1,000, increasing to 3 francs for each 1,000 francs above 3,158,000.

Is there a (legal) way to reduce wealth taxes?

The most obvious (though not always practical) one is to move from a high-tax region to a more favourable one.

There are also some investment schemes which will help you save on wealth taxes, but you will need professional advice on that.

However, there is no way to avoid this tax altogether — unless you really have no single franc to your name.