Is tax charged on death or on gifts by individuals and, if so, which factors cause the tax to apply, when must a tax return be submitted, and at what rate, by whom and when must the tax be paid?

Private Client

France Small Flag France

In France, gift tax is due by the donee on lifetime gifts (see § 5.1.) and inheritance tax is due by the heir/legatee on death of the deceased (5.2.).

The same territorial principles apply to gift tax and inheritance tax. They are due if one of the three following conditions is met:

  • the donor (or deceased) is resident of France as defined by article 4 B of the French tax code (see §1.1.)
  • the donee (or heir) has been resident of France (as defined by article 4 B of the French tax code) for at least six of the preceding ten years.
  • The transferred asset (movable or immovable) is located in France.

The main assets which are considered as located in France for gift tax, inheritance tax and ISF (see §4.1.) purposes are the following:

  • real estate properties located in France
  • movable assets (i.e. furniture, pieces of art) located in France
  • shares of companies registered in France
  • debts when the debtor is resident of France
  • shares of companies (French or foreign) owning real estate properties located in France having a market value exceeding those of their other French movable assets (“société à prépondérance immobilière”).
  • shares of companies (French or foreign) owning real estate properties located in France directly or indirectly held for more than 50% by the same family members (only for the fraction of their market price which represent the market value of real estate properties located in France).

Transfers for no consideration of the above mentioned French assets between non-resident individuals are subject to either French gift tax or French inheritance tax.

5.1. Gift tax
Gift tax is due by the donee but can be paid by the donor. When this is the case the gift tax paid by the donor is not treated as additional gift.

Various allowances, for each fifteen-year period may apply depending on the donor’s relationship with the donee:

  • parent and children in direct line: – 100,000 €
  • brothers and sisters: – 15,932 €
  • nephews and nieces: – 7,967 €
  • spouses or partners: – 80,724 €
  • grandchildren: – 31,865 €
  • great-grandchildren: – 5,310 €
  • disabled people: – 159,325 €
  • other beneficiaries: – 1,594 €

Cash gifts benefiting to children, grandchildren, great grandchildren (nieces and nephews in the absence of direct descendants) are exempted from gift tax up to 31,865 € assuming the donor is under 80 years old and beneficiaries are over 18 years old or emancipated for each fifteen-year period.

The rates of gift tax for 2017/2018 are also different depending on the donor’s relationship with the donee.

Lifetime gifts to spouse or civil partners do not benefit from the exemption which applies to inheritance tax (see below). They are subject to the following progressive scale rates:

  • up to 8,072 € – 5 %
  • from 8,072 € to 15,932 € – 10 %
  • from 15,932 € to 31,865 € – 15 %
  • from 31,865 € to 552,324 € – 20 %
  • from 552,324 € to 902,838 € – 30 %
  • from 902,838 € to 1,805,677 € – 40 %
  • more than 1,805,677 € – 45 %

Lifetime gifts between parents and children in direct line are subject to the same progressive scale rates from 5 % to 45% than those which applies for inheritance tax (see § 5.2.).

Lifetime gifts between brothers and sisters are subject to the same progressive scale rates from 35% to 45% than those applying for inheritance tax (see § 5.2.).

Lifetime gifts between relatives up to the fourth degree, including nephews, nieces, grandnephews and grandnieces, aunts and uncles, grandaunts and granduncles, first cousins are subject to a 55% gift tax.

Other gifts are subject to a 60% gift tax.

Gift tax should be paid within 30 days after the lifetime gift or after its disclosure to the French tax authorities (for manual gifts).

5.2. Inheritance tax
Inheritance tax is due by the heirs.

Allowances described in § 5.1. apply to inheritance tax if they were not already used on gifts made during the fifteen-year period preceding the death.

The rates of inheritance tax for 2017/2018 are also different depending on the deceased’s relationship with the heir.

A total exemption of inheritance tax applies between spouses and civil partners.

The progressive Inheritance tax scale rates between parents and children is as follows:

  • up to 8,072 € – 5 %
  • from 8,072 € to 12,109 € – 10 %
  • from 12,109 € to 15,932 € – 15 %
  • from 15,932 € to 552,324 € – 20 %
  • from 552,324 € to 902,828 € – 30 %
  • from 902,838 € to 1,805,677 € – 40 %
  • more than 1,805,677 € – 45 %

The progressive scale inheritance tax rates applying between brothers and sisters is as follows:

  • up to 24,430 € – 35 %
  • more than 24,430 € – 45 %

The inheritance tax rate applying between relatives up to the fourth degree is 55%.

The inheritance tax rate applicable for more distant relatives and unrelated persons is 60%.

Inheritance tax should be paid within six months following the death if the deceased was resident of France upon his/her death and within one year if he/she was non-resident.

Italy Small Flag Italy

Transfers upon death and gifts are subject to inheritance and gift tax at the following rates and with the following exempt amounts:

(a) 4 per cent, if the transfer is made to spouses and direct descendants or ancestors; here, the transfer is subject to tax on the value exceeding Euro 1 million (this exempt amount applies to each beneficiary);

(b) 6 per cent, if the transfer is made to brothers and sisters; here, the transfer is subject to tax on the value exceeding Euro 100,000 (this exempt amount applies to each beneficiary);

(c) 6 per cent, if the transfer is made to relatives up to the fourth degree, to persons related by direct affinity as well as to persons related by collateral affinity up to the third degree; and

(d) 8 per cent, in all other cases.

Lifetime gifts, executed by the deceased to the beneficiary, erode the amount that is exempt from inheritance gift tax. According to two recent judgments of the Supreme Court (No. 24940 of 6 December 2016 and No. 26050 of 16 December 2016), the exempt amounts available on death are not eroded by lifetime transfers (it is fair to say that the position of the Supreme Court does not seem to be shared by the tax authorities).

Inheritance and gift tax is levied on worldwide assets if the deceased or donor had his or her habitual abode in Italy on the date of demise or gift, otherwise it applies only to Italian-situs assets.

The law sets forth non-refutable presumptions whereby certain assets are deemed to be situated in Italy. For example, the following assets are in any event deemed to be situated in Italy: assets enrolled in the public registers of Italy (such as real estate, ships and aircrafts, trademarks and patents) and connected rights of enjoyment in rem; shares and quotas of companies with either the legal seat or the seat of management or the main object in Italy; bonds and other securities in series, other than shares, issued by Italy or by the aforementioned companies; receivables and cheques if the debtor or the issuer is a resident of Italy (irrespective of the location of the security, if any); receivables secured by property situated within Italy up to the value of the property, irrespective of the residence of the debtor.

The inheritance tax return must be filed within 1 year from the date of demise by either of the individuals called to succeed and the legatees, their legal representatives, the administrators or the persons managing the estate. In the event of a gift executed in form of a donation in front of an Italian public notary, the notary is bound to report the gift to the Italian tax authorities. The tax is assessed by the tax authorities following the filing of the inheritance tax return or the reporting of the gift. Specific rules apply to gifts other than formal donations.

It is common to gift the bare ownership of assets to future generations by reserving the right of usufruct. This triggers the levy of gift tax on the value of the sole bare ownership, whilst the expansion of bare ownership to full ownership, upon the death of the usufruct holder, is not subject to inheritance tax.

Israel Small Flag Israel

Inheritance: There is currently no inheritance or estate tax in Israel and death is not a taxable event.

Gifts: Cash gifts to Israeli individuals are not subject to gift tax. Gifts of other assets to family members or to others in good faith are not taxable, provided that the recipient is not a foreign resident in which case, there is liability to capital gains tax.

Greece Small Flag Greece

Greece charges tax both on inheritance as well as on gifts.

Inheritance tax and gift tax returns are generally filed within 6 months of death or will’s publishing [if deceased or heir is a foreign resident, filing is extended to 12 months] or of gift accepted respectively and tax is paid in 12 equal monthly installments.

The tax rates applied in both cases are affected (i)by the relevant relationship of the deceased/heir and donor/donee and (ii)by the value of the property accepted, while certain reliefs, subject to conditions [value and surface], apply particularly to primary dwellings.

Inheritance and gift tax is due and paid by the receiving party and imposed upon the receiving party’s wealth [not upon the estate or the donor].

Tax rates are indifferent in both cases [inheritance and gift], are calculated progressively and are split in 3 categories, as follows:

Category 1: Spouse [<5 yrs married], children [>18 yrs old], grandchildren, parents, cohabitation, cohabitation partnership

0-150k: 0%
150k-300k: 1%
300k-600k: 5%
above 600k: 10%

[Spouses married over 5 yrs to the deceased and minor children under 18 years old are eligible to tax exemption up to 400k of property’s value while the higher rates are imposed accordingly].

Cash gifts are taxed at 10%, irrespective of amount.

Category 2: Siblings, uncles, aunts, great-grandchildren, grandparents, spouse’s prior marriage children and “in-laws”

0-30k: 0%
30k-100k: 5%
100k-300k: 10%
above 300k: 20%

Cash gifts are taxed at 20%, irrespective of amount.

Category 3: All others

0-6k: 0%
6k-72k: 20%
72k-267k: 30%
above 267k: 40%

Cash gifts are taxed at 40%, irrespective of amount.

Property donated or inherited is subject to tax, generally if:

(a) property is located in Greece regardless of donor’s/donee’s or deceased’s/heir’s residence or nationality or

(b) property is located abroad and owned by Greek national [regardless of residency] unless –in regards to inheritance tax only- the Greek national has been established abroad for more than 10 years [applies to movable property] or

(c) property is located abroad and owned by foreign national who is Greek resident.

Germany Small Flag Germany

Transfers of worldwide assets on death or on gifts are subject to German inheritance or gift tax if at least one of the individuals (transferor or transferee) is resident in Germany. If none of them is a German resident, German inheritance or gift tax may apply to the extent as certain assets located in Germany are transferred (e.g. German real estate, business property which belongs to a permanent establishment in Germany, shares in German companies). A tax treaty may provide shelter from German taxation in certain cases. The applicable tax rate ranges between 7-50 % depending on the value of the assets received and the relationship between the parties involved. Notice on a taxable transfer must be given to the competent authority within 3 months after the transfer. A tax return will then have to be filed within a term to be determined by the authority and the tax will usually become due 30 days after the tax has been assessed by the authority. In general, the tax is to be paid by the transferee.

Belgium Small Flag Belgium

A. Competence of the Regions
Gift and inheritance tax fall under the competence of the three Regions: the Flemish Region, the Brussels Capital Region and the Walloon Region. As a consequence, different gift and inheritance tax rules apply in the three regions. The most relevant differences relate to the categories of gift and inheritance tax rates and the criteria to be considered as partners (spouses and cohabiting persons).

In each region the categories of gift and inheritance tax rates depend on the degree of kinship between the donor or deceased and the beneficiary, the value of the gift or inheritance and the nature of the donated or inherited goods.

B. Relevant factors
The relevant factor that causes Belgian gift tax to apply is the registration of the donation with the Belgian tax authorities. Such registration is mandatory for each donation that is done before a Belgian notary. The registration of a donation of tangible movable property is not mandatory if not done before a Belgian notary; such donation is not subject to gift tax unless it is voluntarily registered with the Belgian tax authorities.

Belgian inheritance tax is due if the deceased was a resident of Belgium, i.e. if he had his domicile or his ‘seat of wealth’ in Belgium. These criteria should be interpreted in the same way as for income taxes (cf. question 1).

For Belgian residents, the region where the donor or deceased has his place of residence will in principle determine which rules will in principle apply (Flemish, Brussels or Walloon).

For non-residents, gift and inheritance tax is due on the donation or inheritance of Belgian immovable property, according to the rules that apply in the region where the immovable property is located. Gift tax on movable property is only due if the donation is registered with the tax authorities. Upon the death of a non-resident, no inheritance tax is due on his Belgian movable property.

C. Inheritance tax
When a Belgian resident passes away, inheritance tax is due on the net value of his worldwide estate. Subject to certain conditions and within certain limits, foreign inheritance tax on foreign immovable property can be offset against the Belgian inheritance tax on the foreign immovable property.

For non-residents, inheritance tax is only due on their Belgian immovable property. If the deceased was a resident of the EEA, inheritance tax is due on the net value, while for non-EEA-residents inheritance tax is due on the gross value.

An inheritance tax return must be filed within four, five or six months from the deceased’s death, depending on the physical location where the deceased was at the time that he passed away (in Belgium/EEA/outside EEA). Upon receipt of the tax bill, the tax is due within two months.

In the Flemish Region, inheritance tax is due as follows:

  • In direct line and between partners: movable and immovable property are taxed separately at rates of 3% to 27% (27% as from EUR 250.000). The calculation is made on the net share per beneficiary.
  • Between brothers and sisters: no split between movable and immovable property. Tax rates go from 30% - 65% (65% as from EUR 125.000). The calculation is made on the net share per beneficiary.
  • Between all other beneficiaries: no split between movable and immovable property. Tax rates go from 45% - 65% (65% as from EUR 125.000). The calculation is made on the total net share of these persons, then divided amongst them according to their share in the inheritance.

In the Brussels Capital Region, inheritance tax is due as follows:

  • In direct line and between partners: tax rates go from 3% to 30% (30% as from EUR 500.000). The calculation is made on the net share per beneficiary.
  • Between brothers and sisters: tax rates go from 20% - 65% (65% as from EUR 250.000). The calculation is made on the net share per beneficiary.
  • Between uncles/aunts and nephews/nieces: tax rates go from 35% - 70% (70% as from EUR 175.000). The calculation is made on the total net share of these persons, then divided amongst them according to their share in the inheritance.
  • Between all other beneficiaries: tax rates go from 40% - 80% (80% as from EUR 175.000). The calculation is made on the total net share of these persons, then divided amongst them according to their share in the inheritance.

In the Walloon Region, inheritance tax is due as follows:

  • In direct line and between partners: tax rates go from 3% to 30% (30% as from EUR 500.000). The calculation is made on the net share per beneficiary.
  • Between brothers and sisters: tax rates go from 20% - 65% (65% as from EUR 175.000). The calculation is made on the net share per beneficiary.
  • Between uncles/aunts and nephews/nieces: tax rates go from 25% - 70% (70% as from EUR 175.000). The calculation is made on the net share per beneficiary.
  • Between all other beneficiaries: tax rates go from 30% - 80% (80% as from EUR 175.000). The calculation is made on the net share per beneficiary.

D. Gift tax
A donation of movable property that is registered, will be taxed at flat rates:

  • in the Flemish Region and the Brussels Capital Region: 3% in direct line and between partners, and 7% between all other persons;
  • in the Walloon Region: 3,3% in direct line and between partners, 5,5% between brothers and sisters, uncles/aunts and nephews/nieces, and 7,7% between all other persons.

Immovable assets are taxed at progressive rates. In the Flemish Region and the Brussels Capital Region the rates vary between 3% and 27% in direct line and between partners (27% as from EUR 450.000). In the Walloon Region, rates vary between 3% and 30% in direct line and between partners (30% as from EUR 500.000). For other persons, the applicable rates are higher, up till 40% as from EUR 450.000 in the Flemish and the Brussels Capital Region and up till 50% as from EUR 450.000 in the Walloon Region.

British Virgin Islands Small Flag British Virgin Islands

No. There are no estate or gift taxes in the BVI.

UAE Small Flag UAE

There is no Inheritance Tax due on death in Dubai however, Dubai citizens and expatriate residents could still be subject to Inheritance Tax or Death Tax in other jurisdictions where they hold assets.

Where real estate property passes on death in Dubai, whether under Shari’a Law or in implementation of a Will, there are transfer fees for the re-registration of the property to the heirs/beneficiaries.

There is no tax payable on gifts by individuals.

New Zealand Small Flag New Zealand

There are no estate taxes, inheritance taxes nor gift taxes in New Zealand.

Monaco Small Flag Monaco

Tax on lifetime gifts only applies to assets that are situated in Monaco, regardless of the domicile, residence or nationality of the donor.

Gift tax is applicable to lifetime gifts evidenced in writing and/or by notarised deed. Gifts that can be made by a physical transfer of property (which does not require a written deed, such as a gift of a chattel) are not subject to tax. Gift tax is in principle paid by the done but can be paid by the donor if intended so. Gift tax is paid when a triggering event of gift tax occurs (notary act for example).

Inheritance tax only applies to assets that are situated in Monaco, regardless of the domicile, residence or nationality of the deceased.

Inheritance or succession tax is payable at the same rate as lifetime gift tax. The rates are of:

  • 0 per cent between spouses and in direct line;
  • 8 per cent between brothers and sisters;
  • 10 per cent between uncles or aunts, nephews or nieces;
  • 13 per cent between other collateral relatives; and
  • 16 per cent between unrelated persons.

Inheritance tax is paid by the heirs when the declaration of succession is filed with the Monegasque notary.

Updated: December 8, 2017