If two people had a wager of CHF 100,000. One person loses the bet, and forks over the money to the other. Who is liable for taxes, and what is the tax rate based on?

Are you studying law? There is a tax on gambling in the UK: the person paying the wager pays the tax in the UK and in some Swiss Cantons, Geneva is one. In Switzerland the winner pays the tax.

You may find that such betting is illegal. Gambling is a licenced activity...

Is this hypothetical? If not, what was the bet?

No, I'm trying to figure the ideal way to transfer a lump sum of money from one person to another.

Hm, well we can practice with my account and go from there. If it takes a few tries, so be it.


Edit. Sorry, carry on with any serious replies...

Relative? If so, what level?

Otherwise, large denomination notes in an envelope.

Alternative, purchase some used object from them, no VAT or other tax in this case.

Tom

In British law it is tax free if the gift has no commercial value. So ideally you should buy her some made to measure clothes, or a non-refundable subscription to the fitness.

What if it was across borders, say one of them is in the US or UK?

What was the bet about? Just curious.

No actual bet. Just hypothetical.

In the US, the receiving party will be required to report it as taxable income, though as mentioned, gambling is a regulated activity and - I've no idea - it may not be legal to gamble 100k privately. Up to 10k per year can be transferred tax free as a gift within family according to a tax attorney I once spoke with in Wisconsin.

Right. I was aware of the 10-15K limit, which is why I purposely posed this as 100,000.

I know that typically in the US, the giver is taxed and the recipient is not. In Switzerland, I was wonder if the gift is considered taxable income for the recipient.

In Zurich, you can receive a gift from family tax free, in the same way that inheritance is untaxed, if the person giving it is outside Kt ZRH.

The other way around I'm not sure, sorry.

What if the gift isn't from family? What if it is from a friend?

In general gifts are taxed according to the proximity you have with the donor.

ie 1st degree relatives no tax / minimal tax
2nd degree minimal tax
the highest level is where there is no family link between the donor and the receiver

Geneva for instance has 5 degrees - you then have to figure out how these degrees are quantified in your canton of residence, but that's the working principle.

You are right about the 10K rule. I know of one elderly woman in the USA who gives 10K per year to each one of her 4 kids. It is my understanding that nobody has to declare anything, nobody has to pay any tax.

I am puzzled about the 10K limit. What happens if she gives 40K to child A, then child A gives 30K to child B, then child B gives 20K to child C, then child C gives 10K to child D? It appears that in the end each child has received 10K. But wait! Child A has to pay tax on the 30K excess, child B has to pay tax on the 20K excess and child C has to pay tax on the 10K excess?

To my amazement, I actually know the answer to that question for Basel Stadt. Between two private persons, it's a gift. You have to put the sum in the little square for gifts in your tax declaration.

Yes, of course. I think I knew too. Perhaps I was just looking for a way to avoid it, legally of course.

I think there is a bit of misinformation here. I believe that in the case of a US person receiving US$, they can receive as much as the giver gives, but the donor (giver) has to take care of the taxes. Right now, the amount tax free is $13,000.

from the IRS website FAQs on gift taxes:
Who pays the gift tax?
The donor is generally responsible for paying the gift tax. Under special arrangements the donee may agree to pay the tax instead. Please visit with your tax professional if you are considering this type of arrangement.

here is the source

but this is probably a moot point if both parties are here in CH?