Inheritance tax and inheritance tax in Europe

0


Inheritance tax traced back to the Roman Empire, which collected 5 percent of inherited property in order to pay soldiers’ pensions. Today, the practice is widespread.

The majority of European countries covered by today’s card currently levy inheritance, inheritance or gift taxes. These countries are Belgium, Bulgaria, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Lithuania, Luxembourg, the Netherlands, Poland, Portugal, Slovenia, Spain, Switzerland, Turkey and the United Kingdom.

An inheritance tax is levied on the property of the deceased and is paid by the estate itself. Inheritance tax, on the other hand, is only levied on the value of the transferred property and is paid by the heirs. Gift tax is levied when ownership is transferred by a living individual. Countries usually only charge inheritance or inheritance tax. However, estates can be double taxed if they are taxed by two jurisdictions that apply different taxes. For this reason, the Member States of the European Union have installed intended mechanisms to prevent or alleviate double taxation if such a situation occurs.

The rates applied to inheritance, inheritance and gift taxes often depend on the level of family proximity to the heir as well as the amount to be inherited. For example, in France, different rates are applied to transmissions to ascendants and descendants, to transmissions between brothers and sisters, to blood relatives up to the fourth degree and to all others. For transfers to ascendants and descendants as well as between siblings, higher rates are applied to larger sums of money.

In some countries, such as Belgium or Switzerland, the tax rates on inheritance, gifts and inheritance also vary by region. Most tax codes do not tax transfers below a certain amount.

Inheritance, inheritance and gift taxes in EU Member States and European OECD countries, as of 2019
Country Inheritance / inheritance / donation tax Tax rate
Austria (AT) No No taxes
Belgium (BE) Yes 1-80%
Bulgaria (BG) Yes 0.4-6.6%
Cyprus (CY) No No taxes
Czech Republic (CZ) Yes* Income tax rate
Denmark (DK) Yes 0-52%
Estonia (EE) No No taxes
Finland (FI) Yes 0-33%
France (FR) Yes 5-60%
Germany (DE) Yes 7-50%
Greece (GR) Yes 1-40%
Hungary (HU) Yes 9-18%
Iceland (IS) Yes ten%
Ireland (IE) Yes 33% once the threshold is exceeded
Italy (IT) Yes 4-8%
Latvia (LV) No No taxes
Lithuania (LT) Yes* 5-10% inheritance tax for property, donations taxed at income tax rate
Luxembourg (LU) Yes 0-15%
Netherlands (NL) Yes 10-40%
Norway (NO) No No taxes
Poland (PL) Yes 0-20%
Portugal (PT) Yes* Stamp duty, 10-21%
Slovakia (SK) No No taxes
Slovenia (SI) Yes 5-39%
Spain (ES) Yes 7.65-81.6%
Sweden (SE) No No taxes
Switzerland (CH) Yes 0-50% depending on canton
Turkey (TR) Yes 1-30%
United Kingdom (GB) Yes 20-40%

Source: EY, “Worldwide Estate and Inheritance Tax Guide 2019”, 2019, https://www.ey.com/en_gl/tax-guides/worldwide-estate-and-inheritance-tax-guide-2019;

and PwC, “Worldwide Tax Summaries Online”, 2020, https://taxsummaries.pwc.com/.

Note: No data was available for Croatia, Malta and Romania.

* Successions, inheritances and / or donations taxed under income tax or stamp duties.

Was this page useful for you?

Thank you!

The Tax Foundation works hard to provide insightful analysis of tax policy. Our work depends on the support of members of the public like you. Would you consider contributing to our work?

Contribute to the Tax Foundation



Leave A Reply

Your email address will not be published.