Inheritance and gift tax on property abroad: EU heirs

Inheritance and gift tax is one of the least harmonised areas of taxation in Europe. There is no single EU rule: each country decides who it taxes, how much and at what rate. For an heir who lives in one country and inherits or receives as a gift a flat in another, two countries may claim tax. This article explains the principles and gives a cautious snapshot. Figures change, and we mark what we could not confirm.

The two basic principles

Situs taxation. The country where the property is located usually taxes the transfer of that property, whatever the nationality or residence of the deceased and of the heir. This is why a flat in France is within French inheritance tax even if everyone involved lives elsewhere.

Residence or citizenship of the heir or donor. The heir's home country may also tax the acquisition, including foreign property. Poland, for example, taxes acquisitions by people who are Polish citizens or have their permanent residence in Poland, as we understand it, including assets abroad.

When both countries tax, relief usually comes from the local tax treaty (there are few treaties on inheritance specifically) or from a domestic credit for tax paid abroad. If neither applies, double taxation is possible. This is a question for a tax adviser before a gift is made.

Gifts versus inheritance

Gift tax is often treated like inheritance tax, with similar allowances and rates, and sometimes with a look-back period that adds earlier gifts together. A notarial gift of a flat abroad also involves local transfer formalities and sometimes local duties. For the buyer's side of the costs see total cost of ownership abroad.

Country snapshot

The figures below are from public sources found by our research and are not a substitute for the tax authority's current text. Check the rule for the year in which the person dies or the gift is made.

• France. Reported: each child has an allowance of EUR 100,000 per parent, and the rest is taxed at progressive rates from 5% to 45% (secondary source). French property is within French tax even if the heirs live abroad.
• Italy. Reported: for a spouse and children the rate is 4% on the value above EUR 1 million per beneficiary; the tax applies to non-residents only for assets located in Italy (secondary source). The rates for siblings and other relatives are higher; we could not confirm them.
• Greece. The tax authority AADE publishes the rules; secondary sources report that for close family (category A) the tax-free amount is up to EUR 150,000 and rates run from 1% to 10%. Check how spouses are treated on AADE's page: AADE, inheritance tax.
• Portugal. There is no inheritance tax as such but stamp duty: spouses, descendants and ascendants are reported to be exempt, others pay a flat 10% (secondary sources). Other property taxes are separate.
• Spain. The tax is state-regulated with regional allowances and bonuses, and the resulting burden can differ greatly between regions. The EU Court of Justice found in 2014 that Spain's treatment of non-residents was discriminatory, and Spain changed the rules; how non-resident heirs use regional rules today should be checked with a Spanish adviser. We give no rates.
• Cyprus. Reported to have no inheritance tax (we could not confirm it on the tax department's page). Other duties such as transfer fees on registration may apply.
• Germany. Reported rates for spouses and children (tax class I) run from 7% to 30%, with an allowance of EUR 400,000 per child (secondary sources, not the federal ministry). Foreign heirs may be taxed on German property.
• Bulgaria. We could not confirm the current rate or allowances. Our understanding is that the tax is municipal and low and that close relatives are treated favourably, but verify with a Bulgarian adviser before relying on this.
• Poland (for heirs resident in Poland). Spouses, descendants, ascendants, stepchildren, siblings and step-parents belong to the zero group, which is exempt regardless of value if the acquisition is reported on form SD-Z2 within six months from the day the tax obligation arose (tax authority information and portals). For an inheritance or gift from abroad, ask the tax office how the six months are counted. Without a timely notice the exemption can be lost. Official site: podatki.gov.pl.
• United Arab Emirates. We found no inheritance tax in the UAE; verify before relying on it. Succession rules and the local registry's requirements are a separate matter, see a will for property in several countries.

Related taxes you should not confuse

Inheritance tax is separate from capital gains tax if the heir later sells (see our guides, for example on Spain and Dubai), from annual property taxes and from income tax on rent (see tax on foreign rental income). The heir's acquisition value for a later sale also depends on local rules.

FAQ

Which country taxes my inheritance of a flat abroad? Usually the country where the flat is, and possibly your country of residence or citizenship as well. Both rules must be checked.

Can I avoid double tax? Often through a treaty or a credit for foreign tax, depending on the countries. Ask an adviser before a gift.

Is a gift to my child cheaper than inheritance? Not necessarily. Allowances, rates and look-back rules vary, and local gift formalities cost money.

What is the deadline in Poland? Six months for the SD-Z2 notice for the zero group, according to the sources we found. Check the start date for your case.

Does the EU Succession Regulation settle the tax? No, it only covers the civil law of succession.

Who pays if the heirs live in different countries? Each heir is usually taxed on their own share, according to the rules of the countries involved.

How we help

We are a trilingual platform that finds properties abroad and coordinates independent local lawyers and tax advisers. This text is informational and is not legal, tax or investment advice; rates and allowances change, so verify current rules with the tax authority or a qualified adviser. Overview of the legal framework: e-Justice portal.