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I am looking for ways to avoid paying taxes on the meager yields I earn on safe investments these days and I came across the concept of zero bonds. Would you recommend this type of bond?
Hi there,
Zero-coupon bonds or "zero bonds" are bonds which do not pay out any yields at all. Instead, a zero bond is sold at a discount on its face value. These bonds are a more risky investment than regular interest-bearing bonds because you do not get any money until the bond matures - and terms are usually long.
In Switzerland, tax is only levied on the difference between the purchase price and the face value of zero bonds when they reach maturity. Having a large lump-sum paid out in one year can lead to your being bumped up into a higher tax bracket.
Best regards from Moneyguru
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