Tax On Inheritance From Abroad | נמרוד ירון ושות׳ https://y-tax.co.il/en/category/tax-on-inheritance-from-abroad-en/ מיסוי בינלאומי ומיסוי ישראלי Thu, 04 Dec 2025 12:52:24 +0000 en-US hourly 1 https://wordpress.org/?v=6.9 https://y-tax.co.il/wp-content/uploads/2020/03/cropped-android-chrome-512x512-1-32x32.png Tax On Inheritance From Abroad | נמרוד ירון ושות׳ https://y-tax.co.il/en/category/tax-on-inheritance-from-abroad-en/ 32 32 Tax Aspects of Inheritance in Spain https://y-tax.co.il/en/tax-aspects-of-inheritance-in-spain/?utm_source=rss&utm_medium=rss&utm_campaign=tax-aspects-of-inheritance-in-spain Thu, 04 Dec 2025 12:31:52 +0000 https://y-tax.co.il/?p=58044

If you own assets in Spain (Barcelona, Madrid, etc.) or are expected to inherit assets in this country, it’s important to understand the legal and tax implications involved in the inheritance process. Each region in Spain has different laws regarding how inheritance tax is charged. This often creates confusion for taxpayers, especially when assets are transferred between different provinces or when dealing with property owners in multiple jurisdictions.

Early understanding of local law, and advance planning of wills, residency, and lifetime gifts can significantly reduce tax exposure when transferring assets between generations.

Beyond that, inheritance tax planning can prevent legal disputes, delays in the inheritance process, and unexpected demands from various authorities.

What is the difference between Estate Tax and Inheritance Tax?

  • Estate tax – imposed on the deceased’s assets before they are transferred to heirs.
  • Inheritance tax – applies to all assets received by the heir.

Inheritance Tax in Spain – What You Need to Know?

Spain has no estate tax, but there is an inheritance tax on assets transferred to heirs.

Spanish residents are taxed on all assets and rights they receive worldwide – whether located inside or outside Spain. In contrast, heirs who are not Spanish residents are taxed only on assets located in Spain or realizable there.

Tax rates are progressive, ranging from 7.65%-34%. In Spain, several benefits and exemptions exist. These depend on specific circumstances such as family relationships, disability, life insurance, family business, and permanent residence.

Tax liability is determined based on the net value of assets transferred to the heir – meaning the asset’s value minus liabilities. Tax liability is calculated per the competent region’s legislation on the net asset value received. If the region has not set specific rates, national rates apply. However, the Basque Country and Navarre have separate tax systems where national rates do not apply.

Each region in Spain may also enact tax reductions, which can significantly reduce tax liability. For example, Madrid grants a 99% tax refund for inheritances and gifts received by certain family members.

Gift Tax

Gift tax is an important part of intergenerational asset transfer planning. Often, when property owners learn the inheritance tax amount, they consider transferring assets as gifts during their lifetime. They believe this is preferable to future inheritance. However, gifts may be taxed at rates identical to inheritance tax or even higher.

In Spain, gift tax applies similarly to inheritance tax. Like inheritance tax, gift tax is calculated per specific circumstances such as family relationships and permanent residence.

Therefore, advance planning of inheritance tax and gift tax is essential when transferring assets between generations. Proper planning maximizes existing exemptions and significantly reduces tax liability. It ensures assets transfer to the next generation in an orderly and efficient manner.

Inheritance Taxation in Israel Compared to Spain

In Israel, unlike Spain, there is no estate tax or inheritance tax. However, in certain cases, tax may be imposed on the full inheritance value. For example, capital gains tax applies upon asset sale.

The Israel-Spain tax treaty includes provisions preventing double taxation. However, accurate reporting and filing planning is essential to avoid double payment.

To read the Israel-Spain tax treaty in Hebrew on the Ministry of Finance website, click here.

Drafting a Will in Spain – The Key to Tax Savings and Dispute Prevention

Inheritance doesn’t always pass smoothly to heirs. Sometimes complex procedural steps are needed to obtain a probate order or permit to realize assets.

Drafting an orderly will is not just a matter of personal wishes; it’s an integral part of estate taxation. A detailed will can ensure assets pass smoothly and efficiently to heirs. The will should include the deceased’s wishes but must align with legal requirements. This ensures its validity is not compromised.

At the will drafting stage, in many cases you can choose which law will apply to it. This choice can have a substantial impact on inheritance planning and its future realization.

Without advance planning (inheritance without a will), the applicable law will be that of the deceased’s last and principal residence.

If you own assets in Spain, our recommendation is to draft a will to ensure the transfer of assets is done as smoothly as possible. A will can prevent misunderstandings or lengthy legal processes. It ensures the process proceeds in an orderly manner even after the deceased’s death.

Have You Received an Inheritance in Spain? 8 Steps for Proper Realization of an Inheritance from Spain

First, check the type of asset to be inherited, its location, the identity and status of heirs, asset value, and other relevant details.

Understanding the relevant country’s tax rules is recommended. This ensures proper and efficient management of inheritance and gift transfers while minimizing unnecessary tax implications.

Examine whether it’s advisable to realize the asset now and if so, where is it better to realize it – in Spain or Israel?

Check fund transfer costs, whether opening an account in Spain or another country is necessary, and what approvals are required.

Consider whether to transfer the asset itself or its proceeds. Evaluate the implications regarding tax, exemptions, and deductions.

Given the double tax treaty, check whether a credit mechanism applies for tax paid in Spain against Israeli tax liability. Ensure reporting is done correctly and accurately to avoid double payment.

Examine future impacts on the asset. For example, future asset sales will often be subject to capital gains tax in Israel as well.

Perform all required actions, submit documents, handle matters with banks in Spain and Israel, and execute the asset transfer.

How Can We Help?

The goal is to transfer the inheritance to heirs in Israel in the most tax-efficient manner. This involves addressing legal issues in Israel and Spain, as well as banking and regulatory matters. For example: Is it better to realize an asset in Spain or transfer it to Israel? How should inheritance funds be transferred to Israeli bank accounts? How can various exemptions among heirs be utilized? Should gifts be given during one’s lifetime? Should a trust be established? Strategic planning, according to law and tax treaties, is essential to minimize tax liabilities.

Nimrod Yaron & Co. has extensive experience providing personal and professional guidance to Israelis with assets or inheritances worldwide, including Spain. We assist from the initial planning stage, through dealings with authorities in Spain and Israel, to transferring inheritance funds to the heir’s bank account.

We work in cooperation with all relevant professional parties in Spain and Israel. We provide legal solutions in tax and banking matters, customized to each case’s circumstances.

If you inherited an asset or wish to bequeath assets in Spain, our team of attorneys specializing in international taxation and inheritance law will be happy to advise you. Contact us for an initial consultation meeting.

Q&A

Do you need to pay tax in Israel on an asset received as inheritance from Spain?

No. There is no inheritance tax in Israel. However, capital gains tax may apply after selling the asset. Check the recommended timing for selling an inherited asset.

Each region defines the tax obligation imposed on heirs separately. Each region sets tax rates, exemption amounts, and calculation methods according to its needs. This leads to significant differences between regions.

Intergenerational asset transfer from abroad is not just a family matter but also a tax and economic one. Advance planning, addressing legal issues in Israel and abroad, can save substantial money and prevent legal complications.

To realize the inheritance optimally and save unnecessary tax payments, examine all tax options. These include utilizing exemptions, gift planning, and establishing companies or trusts.

Through advance tax planning, including drafting a will, utilizing exemptions, and giving gifts during one’s lifetime, tax liability can be significantly reduced.

The choice between giving a gift and inheritance depends on the circumstances of the specific case. Sometimes a gift will be taxed similarly to inheritance. Therefore, legal and tax aspects should be examined before making a decision.

In the absence of a will, the inheritance will be divided among legal heirs according to Spanish inheritance law.

To realize an inheritance in Spain, the following documents are required: death certificate, will (if it exists), copies of heirs’ identity documents, property ownership documents, and bank account confirmations.

The inheritance realization process in Spain can take several months to a year or more. This depends on the estate’s complexity, number of heirs, existence of a will and other factors.

Additional articles:

]]> Tax Aspects of Estate and Inheritance in The United States https://y-tax.co.il/en/tax-aspects-of-estate-and-inheritance-in-the-united-states/?utm_source=rss&utm_medium=rss&utm_campaign=tax-aspects-of-estate-and-inheritance-in-the-united-states Thu, 13 Nov 2025 13:38:35 +0000 https://y-tax.co.il/?p=57299

If you own assets in the United States or expect to inherit assets in this country, it is essential to understand the legal and tax implications involved in the inheritance process.

The United States is one of the world’s most powerful economic powers, and American taxation is a crucial aspect of the American economy and the businesses operating within it. Federal and local taxation in the United States is complex and significantly impacts individuals and companies operating within the Country.

In recent years, many Israelis have encountered tax questions related to properties in New York, Los Angeles, Miami, New Jersey, Chicago, Boston, and more. Not a small part of this stems from the fact that Israelis inherit assets in the US. This means that they may at some point be required to pay U.S. estate and inheritance taxes.

Understanding U.S. law and international tax treaties is critical for businesses operating in the U.S. market and capitalizing on the economic potential of their operations there. Additionally, an early understanding of U.S. law and early planning for wills, residency, and lifetime gifts can significantly reduce exposure to tax payments when transferring assets between generations.

Furthermore, inheritance tax planning may prevent legal disputes, delays in the inheritance realization process, and unexpected demands from various authorities.

What Is the Difference Between Inheritance Tax and Estate Tax?

  • Estate tax – imposed on the testator’s assets before they are transferred to his heirs.
  • Inheritance tax – applies to all assets received by the heir.

Estate Tax in The U.S.

In the U.S., a federal estate tax applies to the estate of a deceased person before it is transferred to their heirs, depending on the value of the estate and the testator’s citizenship. Investors who hold assets in the U.S., even if they are not U.S. citizens or residents, are subject to an estate tax.

A U.S. citizen or resident is required to report all their assets worldwide (including assets in Israel) to calculate the value of the estate. A foreign citizen without U.S. citizenship is required to report all their assets in the U.S.. This tax applies to various assets, including U.S. real estate, securities of U.S.-incorporated companies, cash held in the United States, and more.

Estate tax is a progressive tax, meaning it increases as wealth increases. The amount of estate tax varies between American citizens and non-American citizens. Estates of American citizens are exempt from paying tax up to an amount of $13.99 million as of 2025. In contrast, estates of foreign citizens are exempt up to an amount of only $60,000, and the tax rate is up to 40% on the value of the property (not on the profit generated but on the value of the entire property). For example, owners of investment portfolios worth more than $60,000 in American assets, who are not American citizens, are subject to the estate tax.

What does this mean? If you are an Israeli resident with assets in the U.S., you may pay estate tax on these assets, even if you are not a U.S. citizen. Therefore, it is vital to prepare accordingly.  

For more information on the subject, read the article “American Estate Tax.”

Federal Gift Tax

Gift tax is a crucial aspect of planning for intergenerational asset transfers. Often, when property owners are exposed to the amount of inheritance tax, the option of transferring assets as gifts during the testator’s lifetime arises, as they believe this is preferable to inheriting in the future. However, it should be considered that gifts may be taxable at the same or even higher inheritance tax rates.

A U.S. citizen is subject to federal gift tax on all gifts worldwide (both U.S. and foreign assets). There is an annual exemption ($19,000 per person as of 2025) and a lifetime exemption ($13.99 million in 2025 as part of the estate tax). A report form must be filed for gifts above the annual exemption, beyond the exemption from taxes according to the estate tax.

A foreign citizen without U.S. citizenship is liable for gift tax only on tangible assets located in the U.S. (e.g., shares of a U.S. company are exempt from gift tax). Unlike U.S. citizens, there is only an annual exemption of $19,000 per person in 2025. Beyond the exemption from taxes, there is an estate tax.

Therefore, early inheritance and gift tax planning are essential when transferring assets between generations. Proper planning allows you to maximize existing exemptions, significantly reduce tax liability, and ensure that assets are transferred to the next generation in an orderly and efficient manner.

Estate And Inheritance Tax in the Various U.S. States

In addition to the federal estate tax, some states impose additional estate taxes, while others also collect inheritance taxes.

For example, as of January 1, 2025, in New York State, the estate tax exemption is $7,160,000. If the estate is worth more than that, a tax will be levied. In New York, when the value of the estate exceeds even slightly 105% of the exemption amount (i.e., about $7.5 million), the tax is calculated on the entire estate, not just the portion that exceeds the exemption. Once you cross the exemption, a hefty tax of up to 16% is imposed on the entire estate.

In New York, there is no gift tax per person; however, if a person gives a gift (for example, property or a large sum of money) within three years before their death, the value of that gift will be included in the estate for estate tax purposes.

Inheritance Taxation in Israel vs. The United States

In Israel, unlike the U.S., there is no estate tax or inheritance tax. However, in some instances, a tax may be imposed on the full value of the inheritance received, for example, capital gains tax upon the sale of the property.

Tax Treaty Between Israel and The United States

The United States taxes the income of its citizens living abroad, even if they never visit its territory. Therefore, a tax treaty between Israel and the United States is crucial for American citizens residing in Israel or Israelis living in the United States.

A double taxation treaty is a bilateral agreement in which two countries determine the taxation rules that will apply to income and assets related to both countries. In addition, the treaties include principles for the exchange of information on tax matters between the countries.

Among other things, the treaty between Israel and the U.S. states that the country in which the taxpayer’s income was generated will receive primary taxing rights. In addition, the treaty states that the taxpayer’s country of origin will retain residual taxing rights over their income, even if it was not generated in its territory. That is, it will be able to tax the income but will be obligated to act to prevent double taxation, doing so through tax refunds, credits, or tax deductions.

To read the Israel-U.S. tax treaty in English on the Ministry of Finance website, click here.

Making A Will in The U.S. – The Key to Tax Savings and Avoiding Disputes

Inheritances do not always pass smoothly to their heirs. Sometimes it is necessary to take complex procedural steps to issue an inheritance order or obtain a permit to realize the assets.

Drafting a well-organized will is not just a matter of personal preference; it is an integral part of estate tax planning. A will can ensure that assets are passed smoothly and efficiently to heirs. The will should include the testator’s wishes, but should also be adapted to the requirements of the law so that its validity is not impaired.

When drafting a will, it is often possible to choose the law that will apply to it. This choice can have a significant impact on the planning of the inheritance and its future implementation.

If you own assets in the U.S., we recommend creating a will to ensure a smooth transfer of assets. A will can prevent misunderstandings or lengthy legal processes and ensure that the process continues in an orderly manner even after the testator’s death.

Did You Receive an Inheritance in The U.S.? 7 Steps to Properly Realize an Inheritance from The U.S.

First, you must check the type of asset that is to be inherited, its location, the identity and status of the heirs, the value of the asset, and more. 

It is necessary to examine whether it is worthwhile to realize the asset now, and if so, where it should be realized – in the U.S. or Israel.

It is recommended to check the costs of money transfers, determine if it is necessary to open an account in the U.S. or another country to transfer funds, and identify any required approvals. 

It is necessary to consider whether to transfer the property itself or its consideration, and to determine the tax implications, including exemptions and deductions.

In light of the existence of a double taxation treaty, it is recommended to check whether a mechanism applies for crediting tax paid in the US against tax liability in Israel. It is essential to ensure that reporting is done correctly and accurately to avoid double payment. 

It is recommended to examine the future effects on the asset. For example, in many cases, a future sale of the property will also be subject to capital gains tax in Israel.

Performing all necessary actions, submitting documents, dealing with banks in the US and Israel, and transferring the property.

How Can We Help?

The goal is to transfer the inheritance to heirs in Israel in the most cost-effective manner from a tax perspective, while addressing legal issues in both Israel and the U.S., as well as banking and regulatory concerns. For example, is it worth realizing a particular asset in the U.S. or transferring it to Israel? How can inherited money be transferred to a bank account in Israel? How can the various exemptions between heirs be utilized? Should gifts be given during life? Should a trust be established? And more. Strategic planning, following the law and tax treaties, is essential to minimize tax liabilities.

The firm of Nimrod Yaron & Co. has extensive experience in personally and professionally supporting Israelis with assets or inheritances in the U.S. – from the initial planning stage through dealing with authorities in the U.S. and Israel, to transferring the inheritance funds to the heir’s bank accounts.

We collaborate with all relevant professional entities in the U.S. and Israel, providing legal solutions tailored to both tax and banking perspectives, customized to the specific circumstances of each case.

If you have inherited an asset or wish to bequeath property in the U.S. in the future, our team of lawyers specializing in international taxation and inheritance law will be happy to advise you on this matter – contact us for an initial consultation.

Questions And Answers

Can you avoid the U.S. estate tax if I am not a U.S. citizen or resident?

As the article extensively states, even those who are not U.S. citizens or residents will be liable for estate tax on their U.S. assets that exceed the exemption amount. However, there are many ways to plan your estate wisely while taking advantage of benefits according to the provisions of the law.

Regarding the Federal Estate Tax

The tax liability on the estate does not arise from the status of the heir but from the status of the testator. However, this may have implications for reporting, future planning of the inheritance, and other tax considerations. Therefore, it is crucial to consult with tax experts to ensure that the tax strategy is tailored to both the testator’s and the heir’s status.

Regarding Additional Inheritance Tax or Estate Tax Imposed by Specific States in the U.S.

The liability to pay this tax depends primarily on the relationship between the testator and the heir, for example, whether the heir is the testator’s spouse or child versus a more distant relative. The liability to pay this tax does not depend on the citizenship status of the heir.

As mentioned, in countries where inheritance tax applies, first-degree heirs are generally eligible for a partial or full exemption from paying the tax in most cases.

No. There is no inheritance tax in Israel. However, capital gains tax may apply after the sale of the property. It is important to check the recommended date for selling the inherited property. 

Transferring assets from abroad to an intergenerational level is not only a family matter but is also a tax and financial matter. Early planning, which addresses legal issues in Israel and abroad, can save a significant amount of money and prevent legal complications.

To realize the inheritance in the best possible way and save unnecessary tax payments, all tax options must be examined, including utilizing exemptions, gift planning, establishing companies, trust funds, and more.

Through early tax planning, which includes drafting a will, utilizing exemptions, giving gifts during your lifetime, and more, you can significantly reduce your tax liability.

The choice between giving a gift and an inheritance depends on the circumstances of the case. Sometimes a gift will be taxed similarly to an inheritance. Therefore, the legal and tax aspects should be thoroughly examined before making a decision.

In the absence of a will, the inheritance will be divided among the legal heirs following American inheritance law.

To realize an inheritance in the US, documents such as a death certificate, a will (if one exists), copies of the heirs’ ID cards, property ownership documents, bank account confirmations, and more are required.

It should be considered that the process of realizing an inheritance in the U.S. can take between several months and a year or more, depending on the complexity of the testator’s estate, the number of heirs, the existence of a will, and other factors.

Additional articles:

]]> Tax Aspects of Inheritance in Hungary https://y-tax.co.il/en/tax-aspects-of-inheritance-in-hungary/?utm_source=rss&utm_medium=rss&utm_campaign=tax-aspects-of-inheritance-in-hungary Wed, 20 Aug 2025 13:28:17 +0000 https://y-tax.co.il/?p=55051

If you own assets in Hungary or are expected to inherit assets in this country, it’s important to understand the legal and tax implications involved in the inheritance process, because even non-residents may be required to pay taxes according to local law.

In Hungary, there are complex rules for the taxation of inheritances and gifts, with significant implications for heirs of assets. Early understanding of Hungarian law and advance planning of wills, residency, and gifts during lifetime can significantly reduce exposure to tax payments when transferring assets between generations.

Beyond that, inheritance tax planning can prevent legal disputes, delays in the inheritance process, and unexpected demands from various authorities.

What’s the Difference Between Inheritance Tax and Estate Tax?

  • Estate Tax – Imposed on the deceased’s assets before they are transferred to the heirs.
  • Inheritance Tax – Applies to all assets received by an heir.

Inheritance Tax in Hungary

In Hungary, there is no estate tax, but there is an inheritance tax imposed on each heir separately, according to the value of the inherited assets. Inheritance tax in Hungary is calculated based on the market value of the inheritance received by each heir. The inheritance tax rate is fixed at 18%, but when it comes to inheriting residential properties, a reduced rate of 9% applies.

Hungarian inheritance tax applies to all types of assets located in Hungary, regardless of the heir’s place of residence. Additionally, tax liability may also apply to movable assets located abroad if the heirs are Hungarian citizens or residents, unless a similar tax has been imposed and paid abroad.

However, inheritance tax does not apply to real estate properties located outside Hungary.

 

Exemptions from Inheritance Tax

In certain cases, inheritance will be exempt from tax. Among the exempt assets:

  • Assets inherited by first-degree relatives of the deceased, including parents, children, and spouses.
  • Assets inherited by stepchildren, foster children, stepparents, or foster parents of the deceased are exempt from tax up to 20 million forints.
  • Certain movable assets up to 300,000 forints for each heir.

Gift Tax in Hungary

Gift tax is an important part of planning for the transfer of assets between generations. Often, when property owners are exposed to the amount of inheritance tax, the option of transferring assets as gifts during the testator’s lifetime arises, with the thought that this is preferable to inheriting in the future. However, it should be taken into account that gifts may be taxable at the same or even higher rates than the inheritance tax rates.

In Hungary, there is a gift tax, but in certain cases, assets are exempt from the gift tax. The main exempt assets are as follows:

  • Movable assets worth less than 150,000 forints.
  • Building plots for residential purposes (provided that a residential property is built within four years of acquisition).
  • Gifts on which income tax or social security contributions have been paid.
  • Employee benefits provided by the employer that are exempt from personal income tax.
  • Gifts given to children or parents of the gift-giver.

The exemption from gift tax applies to the same individuals who are eligible for exemption from inheritance tax.

Therefore, early planning for inheritance tax and gift tax is essential when transferring assets between generations. Proper planning allows you to maximize existing exemptions, significantly reduce tax liability, and ensure that assets are transferred to the next generation in an orderly and efficient manner.

Inheritance Taxation in Israel Compared to Hungary

In Israel, unlike Hungary, there is no estate tax or inheritance tax. However, in certain cases, tax may be imposed on the full value of the inheritance received, such as capital gains tax when selling the asset.

The tax treaty between Israel and Hungary includes provisions that can prevent double taxation. Still, it’s important to plan the reporting and filing accurately to avoid double payment.

To read the Israel-Hungary Tax Treaty in English on the Ministry of Finance website, click here.

Making a Will in Hungary – The Key to Tax Savings and Dispute Prevention

Inheritance doesn’t always transfer smoothly to heirs. Sometimes complex procedural steps are needed to obtain a probate order or permission to realize the assets.

Creating an organized will is not just a matter of personal desire; it is an integral part of estate taxation. A detailed will can ensure that assets are transferred smoothly and efficiently to the heirs. The will should include the wishes of the deceased but must also be adapted to the requirements of the law so that its validity is not compromised.

When drafting a will, it is often possible to choose the law that will apply to it. This choice can have a substantial impact on inheritance planning and its future realization.

Without advance planning, meaning inheritance without a will, the law that will apply to the deceased’s assets will be the law of the deceased’s last and principal place of residence. For example, if the deceased’s last place of residence is in Hungary, Hungarian law will apply to their inheritance in Israel.

If you own assets in Hungary, our recommendation is to make a will to ensure that the transfer of assets is done as smoothly as possible. A will can prevent misunderstandings or lengthy legal processes and ensure that the process proceeds in an orderly manner even after the death of the deceased.

Received an Inheritance in Hungary? 7 Steps for Proper Realization of Inheritance from Hungary

First, check the type of asset that is to be inherited, its location, the identity and status of the heirs, the value of the asset, and more.

Consider whether it’s advisable to realize the asset now and if so, where is it better to realize it – in Hungary or in Israel?

It is recommended to check the costs of money transfers, whether there is a need to open an account in Hungary or another country for the purpose of transferring funds, what approvals are required, etc.

Consider whether to transfer the asset itself or its proceeds, and what the implications are in terms of tax, exemptions, deductions, etc.

In light of the existence of a double taxation prevention treaty, it is recommended to check whether there is a mechanism for crediting tax paid in Hungary against tax liability in Israel. Make sure that the reporting is done correctly and accurately to avoid double payment.

It is recommended to examine the future effects on the asset; for example, a future sale of the asset will often be subject to capital gains tax in Israel as well.

Performing all necessary actions, submitting documents, handling matters with banks in Hungary and Israel, and executing the asset transfer.

How Can We Help?

The goal is to transfer the inheritance to heirs in Israel in the most tax-efficient way, while addressing legal issues in Israel and Hungary, and issues related to banking and regulation. For example, whether it’s better to realize a certain asset in Hungary or transfer it to Israel; how to transfer inheritance funds to a bank account in Israel; how to use various exemptions between heirs; whether to give gifts during lifetime; whether to establish a trust; and more. Strategic planning, according to law and tax treaties, is essential to minimize tax liabilities.

Nimrod Yaron & Co. has extensive experience in personally and professionally accompanying Israelis with assets or inheritances in many countries around the world, including Hungary, from the first stage of planning, through dealing with authorities in Hungary and Israel, to transferring inheritance funds to the heir’s bank account.

We work with all relevant professional entities in Hungary and Israel and offer legal solutions both in terms of taxation and banking, tailored to the circumstances of each case.

If you have inherited an asset or wish to bequeath assets in Hungary in the future, our team of lawyers specializing in international taxation and inheritance law will be happy to advise you on this matter – contact us for an initial consultation.

Q&A

Do I need to pay tax in Israel on an asset inherited from Budapest?

No. There is no inheritance tax in Israel. However, capital gains tax may apply after the sale of the property. It is important to check the recommended date for selling the inherited property.

Possibly – it depends on whether the asset is located within Hungary’s borders, or if it’s a specific movable asset inherited from a Hungarian citizen or resident. Additionally, it’s important to examine whether the asset or its value falls within the provisions of the law that are exempt from inheritance tax, either through dedicated exemptions or through relief applicable to certain types of assets.

Gifts to parents and children are exempt from tax. However, gifts to other people may be subject to tax, depending on the value and type of asset.

The transfer of assets between generations from abroad is not just a family matter but also a tax and economic issue. Early planning, considering legal issues in Israel and abroad, can save a lot of money and prevent legal complications.

To realize the inheritance optimally and save unnecessary tax payments, all tax options should be examined, including utilizing exemptions, planning gifts, establishing companies, trust funds, and more.

Through early tax planning, which includes drafting a will, utilizing exemptions, giving gifts during your lifetime, and more, you can significantly reduce your tax liability.

The choice between giving a gift and bequeathing depends on the circumstances of the case. Sometimes a gift will be taxed similarly to an inheritance. Therefore, the legal and tax aspects should be examined before making a decision.

In the absence of a will, the inheritance will be divided among the legal heirs according to Hungarian inheritance law.

To realize an inheritance in Hungary, documents such as a death certificate, a will (if one exists), copies of the heirs’ ID cards, property ownership documents, bank account confirmations, and more are required.

It should be considered that the process of realizing an inheritance in Hungary can take between several months and a year or more, depending on the complexity of the testator’s estate, the number of heirs, the existence of a will, and other factors.

Additional articles:

]]> Tax Aspects of Inheritance in the Netherlands https://y-tax.co.il/en/tax-aspects-of-inheritance-in-the-netherlands/?utm_source=rss&utm_medium=rss&utm_campaign=tax-aspects-of-inheritance-in-the-netherlands Wed, 20 Aug 2025 13:09:56 +0000 https://y-tax.co.il/?p=55045

If you own assets in the Netherlands or are expected to inherit assets in this country, it’s important to understand the legal and tax implications involved.

In the Netherlands, there are complex rules for the taxation of inheritances and gifts, with significant implications for heirs of assets. An early understanding of Dutch law and early planning of wills, residency, and gifts during lifetime can significantly reduce exposure to tax payments when transferring assets between generations.

Beyond that, inheritance tax planning can prevent legal disputes, delays in the inheritance process, and unexpected demands from various authorities.

What’s the Difference Between Inheritance Tax and Estate Tax?

  • Estate Tax – Imposed on the deceased’s assets before they are transferred to the heirs.
  • Inheritance Tax – Applies to all assets received by the heir.

Inheritance Tax in the Netherlands

In the Netherlands, there is no estate tax, but there is an inheritance tax that applies to assets transferred to heirs after the death of a Dutch resident or someone considered a Dutch resident according to law. Dutch inheritance tax does not depend on the residency status of the heir or the location of the assets.

As long as the deceased is not a Dutch resident according to the provisions of the law, there will be no inheritance tax liability for the heirs, even if Dutch real estate is involved.

The tax rate is determined according to the family relationship between the deceased and the heir, and is derived from the fair value of the assets transferred to the heir, as follows:

  • For spouses and children, the tax rate ranges from 10% to 20%. A rate of 10% applies to inheritances valued at up to 154,197 euros, and 20% for the remainder of the inheritance.
  • For grandchildren and great-grandchildren, the tax rate ranges from 18% to 36%.
  • For other heirs, the tax rate ranges from 30% to 40%.

Dutch law establishes tax exemptions that also depend on the relationship between the deceased and the heir. For example, spouses are entitled to an exemption of 636,180 euros, while children are entitled to an exemption of 20,148 euros. The portion exceeding the exemption amount is subject to the tax rates mentioned above.

Gift Tax in the Netherlands

Gift tax is an important part of planning for the transfer of assets between generations. Often, when property owners are exposed to the amount of inheritance tax, the option of transferring assets as gifts during the testator’s lifetime arises, with the thought that this is preferable to inheriting in the future. However, it should be taken into account that gifts may be taxable at the same or even higher rates than the inheritance tax rates.

The Dutch gift tax applies to any transfer of property without consideration, given by a person who was a Dutch resident (or considered a resident) at the time of giving the gift.

In the Netherlands, Dutch citizens are considered residents even if they have left the Netherlands for a period of ten years after emigration. In contrast, non-citizens are considered residents for gift tax purposes only for one year after departure.

Similar to inheritance tax, gift tax is also calculated according to the relationship between the gift giver and the recipient, and at identical tax rates.

Therefore, early planning for inheritance tax and gift tax is essential when transferring assets between generations. Proper planning allows you to maximize existing exemptions, significantly reduce tax liability, and ensure that assets are transferred to the next generation in an orderly and efficient manner.

Inheritance Taxation in Israel Compared to the Netherlands

In Israel, unlike the Netherlands, there is no estate tax or inheritance tax. However, in certain cases, tax may be imposed on the full value of the inheritance received, such as capital gains tax when selling the asset.

The tax treaty between Israel and the Netherlands includes provisions that can prevent double taxation. Still, it’s important to plan the reporting and filing accurately to avoid double payment.

To read the Israel-Netherlands Tax Treaty in English on the Ministry of Finance website, click here.

Making a Will in the Netherlands – The Key to Tax Savings and Dispute Prevention

Inheritance doesn’t always transfer smoothly to heirs. Sometimes complex procedural steps are needed to obtain a probate order or permission to realize the assets.

Creating an organized will is not just a matter of personal desire; it is an integral part of estate taxation. A detailed will can ensure that assets are transferred smoothly and efficiently to the heirs. The will should include the wishes of the deceased but must also be adapted to the requirements of the law so that its validity is not compromised.

When drafting a will, it is often possible to choose the law that will apply to it. This choice can have a substantial impact on inheritance planning and its future realization.

Without advance planning, meaning inheritance without a will, the law that will apply to the deceased’s assets will be the law of the deceased’s last and principal place of residence. For example, if the last place of residence is in the Netherlands, Dutch law will apply to the inheritance in Israel.

If you own assets in the Netherlands, our recommendation is to make a will to ensure that the transfer of assets is done as smoothly as possible. A will can prevent misunderstandings or lengthy legal processes and ensure that the process proceeds in an orderly manner even after the death of the deceased.

Received an Inheritance in Italy? 7 Steps for Proper Realization of Inheritance from Italy

First, check the type of asset that is to be inherited, its location, the identity and status of the heirs, the value of the asset, and more.

Consider whether it’s advisable to realize the asset now, and if so, where is it better to realize it – in the Netherlands or in Israel?

It is recommended to check the costs of money transfers, whether there is a need to open an account in the Netherlands or another country for the purpose of transferring funds, what approvals are required, etc.

Consider whether to transfer the asset itself or its proceeds, and what the implications are in terms of tax, exemptions, deductions, etc.

In light of the existence of a double taxation prevention treaty, it is recommended to check whether there is a mechanism for crediting tax paid in the Netherlands against tax liability in Israel. Make sure that the reporting is done correctly and accurately to avoid double payment.

It is recommended to examine the future effects on the asset; for example, a future sale of the asset will often be subject to capital gains tax in Israel as well.

Performing all necessary actions, submitting documents, handling matters with banks in the Netherlands and Israel, and executing the asset transfer.

How Can We Help?

The goal is to transfer the inheritance to heirs in Israel in the most tax-efficient way, while addressing legal issues in Israel and the Netherlands, and issues related to banking and regulation. For example, whether it’s better to realize a certain asset in the Netherlands or transfer it to Israel; how to transfer inheritance funds to a bank account in Israel; how to use various exemptions between heirs; whether to give gifts during lifetime; whether to establish a trust, and more. Strategic planning, according to law and tax treaties, is essential to minimize tax liabilities.

Nimrod Yaron & Co. has extensive experience in personally and professionally accompanying Israelis with assets or inheritances in many countries around the world, including the Netherlands, from the first stage of planning, through dealing with authorities in the Netherlands and Israel, to transferring inheritance funds to the heir’s bank account.

We work with all relevant professional entities in the Netherlands and Israel and offer legal solutions both in terms of taxation and banking, tailored to the circumstances of the case.

If you have inherited an asset or wish to bequeath assets in the Netherlands in the future, our team of lawyers specializing in international taxation and inheritance law will be happy to advise you on this matter – contact us for an initial consultation.

Q&A

Who is subject to inheritance tax in the Netherlands?

Dutch inheritance tax applies to any person who died as a Dutch resident or was considered a Dutch resident at the time of death.

No. There is no inheritance tax in Israel. However, capital gains tax may apply after the sale of the property. It is important to check the recommended date for selling the inherited property.

The transfer of assets between generations from abroad is not just a family matter but also a tax and economic issue. Early planning, considering legal issues in Israel and abroad, can save a lot of money and prevent legal complications.

To realize the inheritance optimally and save unnecessary tax payments, all tax options should be examined, including utilizing exemptions, planning gifts, establishing companies, trust funds, and more.

Through early tax planning, which includes drafting a will, utilizing exemptions, giving gifts during your lifetime, and more, you can significantly reduce your tax liability.

The choice between giving a gift and bequeathing depends on the circumstances of the case. Sometimes a gift will be taxed similarly to an inheritance. Therefore, the legal and tax aspects should be examined before making a decision.

In the absence of a will, the inheritance will be divided among the legal heirs according to Dutch inheritance law.

To realize an inheritance in the Netherlands, documents such as a death certificate, a will (if one exists), copies of the heirs’ ID cards, property ownership documents, bank account confirmations, and more are required.

It should be considered that the process of realizing an inheritance in the Netherlands can take between several months and a year or more, depending on the complexity of the testator’s estate, the number of heirs, the existence of a will, and other factors.

Additional articles:

]]> Tax Aspects of Inheritance in Italy https://y-tax.co.il/en/tax-aspects-of-inheritance-in-italy/?utm_source=rss&utm_medium=rss&utm_campaign=tax-aspects-of-inheritance-in-italy Wed, 20 Aug 2025 12:56:14 +0000 https://y-tax.co.il/?p=55039

If you own assets in Italy (Rome, Milan, etc.) or are expected to inherit assets in this country, it’s important to understand the legal implications involved in the inheritance process, as even non-residents may be required to pay taxes according to local law.

In Italy, there are complex rules for the taxation of inheritances and gifts, with significant implications for heirs of assets. Early understanding of Italian law and advance planning of wills, residency, and gifts during lifetime can significantly reduce exposure to tax payments when transferring assets between generations.

Beyond that, inheritance tax planning can prevent legal disputes, delays in the inheritance process, and unexpected demands from various authorities.

What’s the Difference Between Inheritance Tax and Estate Tax?

  • Estate Tax – Imposed on the deceased’s assets before they are transferred to the heirs.
  • Inheritance Tax – Applies to all assets received by an heir.

Inheritance Tax in Italy – What You Need to Know?

In Italy, there is no estate tax, but there is an inheritance tax imposed on each heir separately, according to the value of the inherited assets. Inheritance tax in Italy is calculated based on the market value of the inheritance received by each heir.

Italian inheritance tax applies to worldwide assets when the deceased was an Italian tax resident, and applies to assets in Italy when the deceased was a non-resident. This means that Italian inheritance tax applies to all types of assets located in Italy, regardless of the heir’s place of residence.

Inheritance Tax Rates in Italy

  • Spouses, children, grandchildren, and parents – enjoy an exemption of one million euros per heir, with the remainder taxed at a fixed rate of 4%.
  • Siblings – enjoy an exemption of 100,000 euros per heir, with the remainder taxed at a rate of 6%.
  • Other relatives up to the fourth degree – the entire value of the inheritance is taxed at a rate of 6%.
  • Others – the entire value of the inheritance is taxed at a rate of 8%.

Gift Tax

Gift tax is an important part of planning for the transfer of assets between generations. Often, when property owners are exposed to the amount of inheritance tax, the option of transferring assets as gifts during the testator’s lifetime arises, with the thought that this is preferable to inheriting in the future. However, it should be taken into account that gifts may be taxable at the same or even higher rates than the inheritance tax rates.

In Italy, the gift tax rate is identical to the inheritance tax rate. Also, like inheritance tax, gift tax is calculated according to the relationship between the giver and the recipient.

Therefore, early planning for inheritance tax and gift tax is essential when transferring assets between generations. Proper planning allows you to maximize existing exemptions, significantly reduce tax liability, and ensure that assets are transferred to the next generation in an orderly and efficient manner.

Inheritance Taxation in Israel Compared to Italy

In Israel, unlike Italy, there is no estate tax or inheritance tax. However, in certain cases, tax may be imposed on the full value of the inheritance received, such as capital gains tax when selling the asset.

The tax treaty between Israel and Italy includes provisions that can prevent double taxation. Still, it’s important to plan the reporting and filing accurately to avoid double payment.

To read the Israel-Italy Tax Treaty in English on the Ministry of Finance website, click here.

Making a Will in Italy – The Key to Tax Savings and Dispute Prevention

Inheritance doesn’t always transfer smoothly to heirs. Sometimes complex procedural steps are needed to obtain a probate order or permission to realize the assets.

Creating an organized will is not just a matter of personal desire; it is an integral part of estate taxation. A detailed will can ensure that assets are transferred smoothly and efficiently to the heirs. The will should include the wishes of the deceased but must also be adapted to the requirements of the law so that its validity is not compromised.

Italy has a system of ‘forced heirship,’ meaning there are specific rules regarding how a deceased person’s estate must be distributed, with part of the estate automatically passing to family members with inheritance rights (spouse and children). In Italy, the testator has the right to choose to whom to leave their assets or part of their assets, and for this purpose, they must make a valid will that clearly and legally explains how the assets should be distributed.

When drafting a will, it is often possible to choose the law that will apply to it. When dealing with assets in Italy, this choice can have a substantial impact on inheritance planning and its future realization. Without advance planning, the law that will apply to the deceased’s assets will be the law of the deceased’s last and principal place of residence.

Without advance planning, meaning inheritance without a will, the law that will apply to the deceased’s assets will be the law of the deceased’s last and principal place of residence.

If you own assets in Italy, our recommendation is to make a will to ensure that the transfer of assets is done as smoothly as possible. A will can prevent misunderstandings or lengthy legal processes and ensure that the process proceeds in an orderly manner even after the death of the deceased.

Received an Inheritance in Italy? 7 Steps for Proper Realization of Inheritance from Italy

First, check the type of asset that is to be inherited, its location, the identity and status of the heirs, the value of the asset, and more.

Consider whether it’s advisable to realize the asset now and if so, where is it better to realize it – in Italy or in Israel?

It is recommended to check the costs of money transfers, whether there is a need to open an account in Italy or another country for the purpose of transferring funds, what approvals are required, etc.

Consider whether to transfer the asset itself or its proceeds, and what the implications are in terms of tax, exemptions, deductions, etc.

In light of the existence of a double taxation prevention treaty, it is recommended to check whether there is a mechanism for crediting tax paid in Italy against tax liability in Israel. Make sure that the reporting is done correctly and accurately to avoid double payment.

It is recommended to examine the future effects on the asset; for example, a future sale of the asset will often be subject to capital gains tax in Israel as well.

Performing all necessary actions, submitting documents, handling matters with banks in Italy and Israel, and executing the asset transfer.

How Can We Help?

The goal is to transfer the inheritance to heirs in Israel in the most tax-efficient way, while addressing legal issues in Israel and Italy, and issues related to banking and regulation. For example, whether it’s better to realize a certain asset in Italy or transfer it to Israel; how to transfer inheritance funds to a bank account in Israel; how to use various exemptions between heirs; whether to give gifts during lifetime; whether to establish a trust, and more. Strategic planning, according to law and tax treaties, is essential to minimize tax liabilities.

Nimrod Yaron & Co. has extensive experience in personally and professionally accompanying Israelis with assets or inheritances in many countries around the world, including Italy, from the first stage of planning, through dealing with authorities in Italy and Israel, to transferring inheritance funds to the heir’s bank account.

We work with all relevant professional entities in Italy and Israel and offer legal solutions both in terms of taxation and banking, tailored to the circumstances of the case.

If you have inherited an asset or wish to bequeath assets in Italy in the future, our team of lawyers specializing in international taxation and inheritance law will be happy to advise you on this matter – contact us for an initial consultation.

Q&A

Do I need to pay tax in Israel on an asset inherited from Rome?

No. There is no inheritance tax in Israel. However, capital gains tax may apply after the sale of the property. It is important to check the recommended date for selling the inherited property.

The transfer of assets between generations from abroad is not just a family matter but also a tax and economic issue. Early planning, considering legal issues in Israel and abroad, can save a lot of money and prevent legal complications.

To realize the inheritance optimally and save unnecessary tax payments, all tax options should be examined, including utilizing exemptions, planning gifts, establishing companies, trust funds, and more.

Through early tax planning, which includes drafting a will, utilizing exemptions, giving gifts during your lifetime, and more, you can significantly reduce your tax liability.

The choice between giving a gift and bequeathing depends on the circumstances of the case. Sometimes a gift will be taxed similarly to an inheritance. Therefore, the legal and tax aspects should be examined before making a decision.

In the absence of a will, the inheritance will be divided among the legal heirs according to Italian inheritance law.

To realize an inheritance in Italy, documents such as a death certificate, a will (if one exists), copies of the heirs’ ID cards, property ownership documents, bank account confirmations, and more are required.

It should be considered that the process of realizing an inheritance in Italy can take between several months and a year or more, depending on the complexity of the testator’s estate, the number of heirs, the existence of a will, and other factors.

Additional articles:

]]> Tax Aspects of Inheritance in Sweden https://y-tax.co.il/en/tax-aspects-of-inheritance-in-sweden/?utm_source=rss&utm_medium=rss&utm_campaign=tax-aspects-of-inheritance-in-sweden Wed, 20 Aug 2025 12:05:53 +0000 https://y-tax.co.il/?p=55030

The absence of inheritance and gift tax in Sweden offers significant benefits in transferring wealth between generations, but it is still important to plan early. Intelligent planning of assets – whether in a will or during one’s life – may save tens or even hundreds of thousands of shekels, especially when it comes to assets with high capital gain potential or with tax implications in other countries. In this article, we will highlight the benefits of investing in Sweden, compare the circumstances to Israel and other European countries, and discuss the importance of early planning and creating a will.

Abolition of Inheritance and Gift Tax in Sweden

At the end of 2004, Sweden abolished inheritance and gift taxes, becoming one of the few countries in Europe where intergenerational asset transfers can be made without tax liability. Sweden eliminated inheritance tax as part of a reform aimed at improving conditions for wealth transfer between generations and encouraging entrepreneurship. This move stemmed from the understanding that these taxes primarily affected middle and lower-class families, while the wealthy managed to avoid them through sophisticated tax planning.

Currently, Sweden does not charge any tax on the transfer of assets through inheritance or gifts – not from the testator, not from the giver, and not from the recipient. This fact makes it an attractive destination in terms of intergenerational planning and family investments.

Why is it important to plan in advance?

Despite the absence of inheritance tax in Sweden, it’s important to understand that estate planning is not just a tax matter – it is primarily a legal, regulatory, and familial issue. Inheritances may encounter bureaucratic obstacles, objections, and even unexpected tax liabilities in other countries.

Inheritance taxation in Israel compared to Sweden

In Israel, like Sweden, there is no estate or inheritance tax. However, in some cases, tax may be imposed on the full value of the received inheritance, such as capital gains tax when selling the property.

The tax treaty between Israel and Sweden includes provisions that can prevent double taxation, but it is important to plan reporting and filing accurately to avoid double payment.

To read the Israeli-Swedish tax treaty in Hebrew on the Ministry of Finance website, click here.

Comparisons to other European countries

Most European countries continue to impose inheritance tax at varying rates:

France: 5%-60%

Germany: 7%-50%

Belgium: 3%-80%

Netherlands:  10%-40%

Countries such as Austria and Norway abolished their inheritance tax, similar to Sweden.

Making a will in Sweden – the key to saving taxes and avoiding disputes

Despite the absence of inheritance tax, drafting a will in Sweden is important due to local inheritance laws. Heirs do not always receive the inheritance smoothly. Sometimes complex procedural steps are needed to obtain a probate order or permission to realize assets. A will allows for the distribution of assets according to the wishes of the deceased and prevents future disputes.

A well-organized and detailed will can ensure that assets are transferred smoothly and efficiently to the heirs. The will should include the testator’s wishes but must also comply with legal requirements to remain valid.

During the drafting stage, it is often possible to choose which local law will apply to the will. This choice can significantly affect estate planning and future implementation.

Without prior planning – i.e., inheritance without a will – the law that will apply to the deceased’s assets is that of their last primary place of residence.

If you own assets in Sweden, our recommendation is to draft a will to ensure the asset transfer is carried out as smoothly as possible. A will can prevent misunderstandings or prolonged legal proceedings and ensure the process is orderly even after the testator’s death.

Practical information about exercising inheritance in Sweden

To claim an inheritance in Sweden, documents such as the deceased’s death certificate, a will (if available), copies of the heirs’ identity documents, asset ownership documents, bank account confirmations, and more are usually required.

It is important to note that the process of claiming an inheritance in Sweden can take from several months up to a year or more, depending on the complexity of the estate, the number of heirs, the existence of a will, etc.

Received an inheritance in Sweden? Here are 6 steps to properly realize an inheritance from Sweden

First, check the type of assets that will be inherited, the location, the identity of the heirs and their status, the value of the assets, and more.

It is necessary to consider whether it is worthwhile to realize (sell or use) the assets now, and if so, where it is better to do so – in Sweden or in Israel?

Check the costs of transferring the funds, whether it is necessary to open an account in Sweden or another country for transferring the funds, what approvals are required, etc.

Consider whether to transfer the assets themselves or their proceeds (money from their sale), and what the implications are in terms of taxes, exemptions, deductions, etc.

It is advisable to examine the future effects on the assets – for example, a future sale of the assets may, in many cases, be subject to capital gains tax in Israel.

Perform all required actions, provide documents, handle matters with banks in Sweden and Israel, then complete the asset transfer.

How Can We Help?

The goal is to transfer the inheritance to the heirs in Israel in the most tax-efficient manner, while addressing legal issues both in Israel and Sweden, as well as matters related to banking and regulation. For example, should a specific asset be realized (sold) in Sweden or transferred to Israel? How should inheritance funds be transferred to a bank account in Israel? How can the various exemptions available to different heirs be utilized? Should gifts be given during one’s lifetime? Should a trust be established? Strategic planning, in accordance with applicable laws and tax treaties, is essential to minimize tax liabilities.

The firm Nimrod Yaron & Co. has extensive experience in providing personal and professional guidance to Israelis with assets and inheritances in many countries around the world, including Sweden, from the initial planning stages, through dealings with authorities in both Sweden and Israel, and all the way to transferring the inheritance funds to the heir’s bank account.

We collaborate with all relevant professional parties in both Sweden and Israel and provide legal solutions tailored to the specific circumstances, both in terms of taxation and banking.

If you have inherited assets or intend to bequeath assets in Sweden in the future, our team of experts specializing in international taxation and inheritance law would be happy to advise you on the matter – contact us to schedule an initial consultation.

Q&A

Is tax payable in Israel on a property inherited from Stockholm, Sweden?

No. There is no inheritance tax in Israel. However, capital gains tax may apply upon the sale of the inherited assets. It is important to determine the recommended timing for selling the inherited assets.

Intergenerational asset transfers from abroad are not only a family matter but also a tax and financial issue. Early planning, with attention to legal matters in both Israel and abroad, can save significant amounts of money and prevent legal complications.

In the absence of a will, the inheritance will be distributed among the legal heirs according to Swedish inheritance law.

To process an inheritance in Sweden, documents such as a death certificate, a will (if available), copies of heirs’ ID cards, property ownership documents, bank account confirmations, and more are required.

The inheritance process in Sweden can take anywhere from several months to a year or more, depending on the complexity of the deceased’s estate, the number of heirs, whether a will exists, and other factors.

Additional articles:

]]> Tax Aspects of Inheritance in Ireland https://y-tax.co.il/en/tax-aspects-of-inheritance-in-ireland/?utm_source=rss&utm_medium=rss&utm_campaign=tax-aspects-of-inheritance-in-ireland Thu, 14 Aug 2025 10:51:08 +0000 https://y-tax.co.il/?p=54854

If you own assets in Ireland (Dublin, Cork, etc.) or are expected to inherit assets in this country, it’s important to understand the legal and tax implications involved in the inheritance process. 

In Ireland, there are rules for taxing inheritances. Reference to tax rates. Early understanding of local law and early planning of wills, residency, and gifts during lifetime can significantly reduce exposure to tax payments when transferring assets between generations.

Beyond that, inheritance tax planning can prevent legal disputes, delays in the inheritance process, and unexpected demands from various authorities.

 What’s the Difference Between Tax and Estate Tax?

  • Estate Tax – Imposed on the deceased’s assets before they are transferred to the heirs.
  • Inheritance Tax – Applies to all assets received by the heir.

Inheritance Tax in Ireland  – What You Need to Know?

In Ireland, inheritance tax is called Capital Acquisitions Tax (CAT). is charged at 33% on inheritances that exceed specific tax-free thresholds, which vary depending on the relationship between the beneficiary and the deceased. CAT is imposed on both gifts and inheritances, with both being taxed in the same manner. The amount of CAT is determined according to the market value or a professional valuation of the property, and the tax is payable by the recipient of the gift or inheritance.

CAT applies in the following situations:

  1. The heir or recipient is resident or ordinarily resident in Ireland;
  2. The testator or donor is, or was at the time of death, resident or ordinarily resident in Ireland;
  3. The property is located in Ireland.

This means that even assets located outside Ireland may be subject to CAT if either the giver or the recipient is resident or ordinarily resident in Ireland. However, if both the deceased and the beneficiary are non-residents and the property is situated outside Ireland, CAT does not apply.

Exemptions and Relief 

There are several situations in which individuals may be exempt from CAT, including:

  • Inheritance received from spouse or civil partner.
  • Inheritance of a dwelling house: The exemption applies if the beneficiary lived in the house as their main residence for at least three years before inheriting, owns no other dwelling, and continues to live there for six years after the inheritance. Additionally, the deceased must have used the house as their main residence, unless exceptions apply due to ill health or dependency.
  • Gifts with a value of €3,000 or less from any person in any one calendar year are exempt from CAT.

Tax-Free Threshold Amounts by Family Relationship

The relationship between the deceased and the beneficiary does not affect the flat 33% CAT rate; everyone pays this rate once the relevant threshold is exceeded. However, the tax-free threshold amount varies depending on your relationship to the person providing the inheritance.

  • Group A: 400,000 euros.
  • Group B: 40,000 euros.
  • Group C: 20,000 euros.

 

Group A: Children (including adopted children, children of a spouse or civil partner, minor children of a deceased child, and foster children in certain cases), as well as parents who inherit a full (unconditional) share of their child’s estate.

Group B:  Parents (in the case of a gift or a limited share), siblings, nephews and nieces, grandchildren (not included in Group A), grandparents, and certain relatives of foster or adopted children.

Group C:  All other relatives and individuals not included in Groups A or B, such as uncles, aunts, cousins, in-laws, friends, and others.

Inheritance Taxation in Israel Compared to Ireland

 In Israel, unlike Ireland, there is no estate tax or inheritance tax. However, in certain cases, tax may be imposed on the full value of the inheritance received, such as capital gains tax when selling the asset.

The tax treaty between Israel and Ireland  (if it exists) includes provisions that can prevent double taxation. Still, it’s important to plan the reporting and filing accurately to avoid double payment.

To read the Israel-Ireland Tax Treaty in English on the Ministry of Finance website, click here.

Making a Will in Ireland  – The Key to Tax Savings and Dispute Prevention

Inheritance doesn’t always transfer smoothly to the heirs. Sometimes complex procedural steps are needed to obtain a probate order or permission to realize the assets.

Creating an organized will is not just a matter of personal desire; it is an integral part of estate taxation. A detailed will can ensure that assets are transferred smoothly and efficiently to the heirs. The will should include the wishes of the deceased but must also be adapted to the requirements of the law so that its validity is not compromised.

At the stage of drafting a will, in many cases, it is possible to choose the law that will apply to it. This choice can have a substantial impact on inheritance planning and its future realization.

Ireland does not have strict forced heirship laws like some European countries, but the surviving spouse has a legal right to a share of the estate. If there are no children, the spouse is entitled to half. If there are children, the spouse gets one-third, no matter what the will says. Children have no automatic right to inherit, but they can challenge a will if they believe they were not properly provided for.

Without advance planning, meaning inheritance without a will, the implication is that the law that will apply to the deceased’s assets will be the law of the deceased’s last and primary place of residence. This means that if, for example, their last place of residence was in Ireland, local law will apply to their inheritance and will determine the distribution among legal heirs, with preference given to the spouse and children.

If you own assets in Ireland, our recommendation is to make a will to ensure that the transfer of assets is done as smoothly as possible. A will can prevent misunderstandings or lengthy legal processes and ensure that the process proceeds in an orderly manner even after the death of the deceased.

Received an Inheritance in Ireland? Number of Steps for Proper Realization of Inheritance from Ireland

First, check the type of asset that is to be inherited, its location, the identity and status of the heirs, the value of the asset, and more.

Consider whether it’s advisable to realize the asset now, and if so, where is it better to realize it – in Ireland or Israel?

It is recommended to check the costs of money transfers, whether there is a need to open an account in Ireland or another country to transfer funds, what approvals are required, etc.

Consider whether to transfer the asset itself or its proceeds, and what the implications are in terms of tax, exemptions, deductions, etc.

In light of the existence of the double taxation prevention treaty, it is recommended to check whether there is a mechanism for crediting tax paid in Ireland against tax liability in Israel. Make sure that the reporting is done correctly and accurately to avoid double payment.

It is recommended to examine the future effects on the asset, for example, a future sale of the asset will often be subject to capital gains tax in Israel as well.

Performing all necessary actions, submitting documents, handling matters with banks in Ireland and Israel, and executing the asset transfer.

How Can We Help?

The goal is to transfer the inheritance to heirs in Israel in the most tax-efficient way, while addressing legal issues in Israel and Ireland and issues related to banking and regulation. For example, whether it’s better to realize a certain asset in Ireland or transfer it to Israel; how to transfer inheritance funds to a bank account in Israel; how to use various exemptions between heirs; whether to give gifts during lifetime; whether to establish a trust, and more. Strategic planning, according to law and tax treaties, is essential to minimize tax liabilities.

Nimrod Yaron & Co. has extensive experience in personally and professionally accompanying Israelis with assets or inheritances in many countries around the world, including Ireland, from the first stage of planning, through dealing with authorities in Ireland and Israel, to transferring inheritance funds to the heir’s bank account.

We work with all relevant professional entities in Ireland and Israel and offer legal solutions both in terms of taxation and banking, tailored to the circumstances of the case.

If you have inherited an asset or wish to bequeath assets in Ireland in the future, our team of lawyers specializing in international taxation and inheritance law will be happy to advise you on this matter – contact us for an initial consultation.

Q&A

Do I need to pay tax in Israel on an asset inherited from Ireland?

No. There is no inheritance tax in Israel. However, capital gains tax may apply after the sale of the property. It is important to check the recommended date for selling the inherited property.

The transfer of assets between generations from abroad is not just a family matter but also a tax and economic issue. Early planning, considering legal issues in Israel and abroad, can save a lot of money and prevent legal complications.

To realize the inheritance optimally and save unnecessary tax payments, all tax options should be examined, including utilizing exemptions, planning gifts, establishing companies, trust funds, and more.

Through early tax planning, which includes drafting a will, utilizing exemptions, giving gifts during your lifetime, and more, you can significantly reduce your tax liability.

The choice between giving a gift and bequeathing depends on the circumstances of the case. Sometimes a gift will be taxed similarly to an inheritance. Therefore, the legal and tax aspects should be examined before making a decision.

In the absence of a will, the inheritance will be divided among the legal heirs according to the local inheritance law of Ireland.

To realize an inheritance in Ireland, documents such as a death certificate, a will (if one exists), copies of the heirs’ ID cards, property ownership documents, bank account confirmations, and more are required.

It should be considered that the process of realizing an inheritance in Ireland can take between several months and a year or more, depending on the complexity of the testator’s estate, the number of heirs, the existence of a will, and other factors. 

Additional articles:

]]> Inheritance Tax Planning in France https://y-tax.co.il/en/inheritance-tax-planning-in-france-2/?utm_source=rss&utm_medium=rss&utm_campaign=inheritance-tax-planning-in-france-2 Wed, 13 Aug 2025 16:41:37 +0000 https://y-tax.co.il/?p=54836

How to Reduce Tax Liability by Tens of Percent – A Guide to Inheritance Planning in France

If you own assets in France or plan to purchase assets in this country, it’s important to know: France has a high inheritance tax that can reach 60% of the inheritance value. Your heirs could easily lose tens of percent of their inheritance – even if they are not residents of France.

France has complex rules for taxing inheritances with substantial implications for heirs. Early understanding of French law and advance planning of wills, residency, and lifetime gifts can significantly reduce exposure to tax payments when transferring assets between generations. Beyond that, it can prevent legal disputes, delays in the inheritance process, and unexpected demands from various authorities.

Inheritance Tax in France – What You Need to Know?

In France, unlike Israel, there is no comprehensive exemption for inheritances. The French inheritance tax is imposed on the heir after receiving the assets. The tax is progressive and increases according to the family relationship between the deceased and the heir, their place of residence, and the value of the assets.

Who is Required to Pay Inheritance Tax in France?

The answer depends on the place of residence of both the deceased and the heirs.

If the deceased was a resident of France or the heir is a resident of France (at the time of transfer and for more than 6 out of the last 10 years), the assets received by the heir, whether located inside or outside France, are subject to inheritance tax.

If neither the deceased nor their heirs are French tax residents, only the transferred assets located in France are subject to French inheritance tax.

What is the Inheritance Tax Rate in France?

  • Parents, children, and descendants – Tax rates range from 5% for inheritance up to €8,072, to 45% for inheritance over €1,805,677.
  • Siblings – Tax rates range from 35% for inheritance up to €24,430, to 45% for inheritance over this amount.
  • Other relatives up to the fourth degree – Fixed tax rate of 55%.
  • Distant relatives or others – Fixed tax rate of 60%.

Inheritance Tax Relief

  • Married spouses – Exempt from inheritance tax.
  • Children/Parents – Personal exemption of €100,000.
  • Siblings – Personal exemption of €15,932. The deceased’s siblings are exempt from inheritance tax if they meet one of three conditions: single/widowed/divorced/separated at the time of death; over 50 years old/disabled at the time of death; lived continuously with the deceased for five years preceding their death.
  • Nieces/Nephews – Personal exemption of €7,967.
  • Heirs with disabilities – Additional exemption of €159,325 (if certain conditions are met).

These rules highlight the complexity of inheritance taxation in France, especially regarding the residency of the deceased and heir, exemptions, valuation, and more. Understanding French law is important for efficient tax planning.

Gift Tax

Gift tax is an important part of planning for intergenerational asset transfers. Often, when asset owners are exposed to high inheritance tax, the option of transferring assets as gifts during the donor’s lifetime arises, thinking this is preferable to bequeathing in the future. However, it should be taken into account that gifts may be subject to tax at rates identical to or even higher than inheritance tax.

In France, gift tax is calculated at rates similar to inheritance tax. Therefore, if large gifts are transferred, they may be subject to tax. However, there are exemptions and mitigating arrangements for business gifts or gifts from first-degree relatives, subject to certain conditions.

Therefore, early planning for inheritance and gift tax is essential when transferring assets between generations. Proper planning allows you to maximize existing exemptions, significantly reduce tax liability, and ensure that assets are transferred to the next generation in an orderly and efficient manner.

Inheritance Taxation in Israel Compared to France

In Israel, unlike France, there is no estate tax or inheritance tax. However, in certain cases, tax may be imposed on the full value of the inheritance received, such as capital gains tax when selling the asset.

The tax treaty between Israel and France includes provisions that can prevent double taxation, but it is important to plan the reporting and filing accurately to avoid double payment.

To read the treaty in French on the Ministry of Finance website, click here.

Making a Will in France – The Key to Tax Savings and Dispute Prevention

Inheritance does not always transfer smoothly to heirs. Sometimes complex procedural steps are needed to obtain a probate order or permission to realize the assets.

Creating an organized will is not just a matter of personal desire; it is an integral part of estate taxation. A detailed will can ensure that assets are transferred smoothly and efficiently to the heirs. The will should include the wishes of the deceased but must also be adapted to the requirements of the law so that its validity is not compromised.

When drafting a will, it is often possible to choose the law that will apply to it. When dealing with assets in France, this choice can have a substantial impact on inheritance planning and its future realization. For example, a French person who is also Israeli can choose to apply Israeli law to their estate even if they live in France and their assets are in France. A testator might want Israeli law to apply rather than French law due to the limitations of French law. For instance, according to French inheritance laws, children are forced heirs whose share cannot be diminished.

Without advance planning, i.e., inheritance without a will, the law that will apply to the deceased’s assets will be the law of the deceased’s last and principal place of residence. For example, if the last place of residence is in France, French law will apply to the inheritance in Israel. This means that the deceased will not be able to bequeath their assets in Israel as they wish, but part of their estate will be reserved for their forced heirs under French law.

If you own assets in France, our recommendation is to make a will to ensure that the transfer of assets is done as smoothly as possible. A will can prevent misunderstandings or lengthy legal processes and ensure that the process proceeds in an orderly manner even after the death of the deceased.

6 Steps to Inheritance Tax Planning

First, examine the type of asset to be inherited, its location in France, the identity of the heirs, the value of the asset, and more.

Individual Residency in France

According to the law, an individual will be considered a resident of France for tax purposes if at least one of the following criteria is met:

  • Their main residence is in France.
  • They are physically present in France for more than 183 days a year, either with their spouse and/or children, or independently.
  • Their profession, occupation, or main work is in France (in terms of time spent or income derived from such activity); or
  • Their center of their economic interests is in France (most of their income and profits come from a French source)

For more information on how an individual is considered an Israeli resident for tax purposes, click here.

After determining residency, the inheritance tax that will apply to each heir can be calculated according to their relationship with the deceased and the amount transferred to them by inheritance. As part of the calculation, various exemptions applicable in France should be considered.

In light of the existence of a double taxation prevention treaty, it is recommended to check whether there is a mechanism for crediting tax paid in France against tax liability in Israel. Make sure that the reporting is done correctly and accurately to avoid double payment.

It is recommended to examine the future effects on the asset, for example, a future sale of the asset will often be subject to capital gains tax in Israel as well.

The goal is to transfer the inheritance to heirs in Israel in the most tax-efficient way, while addressing legal issues in Israel and France and issues related to banking and regulation. For example, whether it is better to realize a certain asset in France or transfer it to Israel, whether it is advisable to give gifts during lifetime, how to transfer inheritance funds from France to a bank account in Israel, and more.

To reduce the value of the estate or exposure to this tax and decide which solution is better to implement, an in-depth examination of the circumstances on an individual basis is necessary.

How Can We Help?

Nimrod Yaron & Co. has extensive experience in inheritance tax planning in France and in accompanying Israelis in international inheritance realization processes. Our team of expert lawyers will be happy to assist you in optimal tax planning and in realizing the inheritance of assets in France.

We collaborate with all relevant professional entities in France and Israel and offer legal solutions both in terms of taxation and banking, tailored to the circumstances of the case.

If you wish to bequeath assets in France in the future, our lawyers specializing in inheritance taxation will be happy to advise you on this matter – contact us.

Q&A

Why is it important to plan the transfer of assets between generations in advance?

The transfer of assets between generations from abroad is not just a family matter but also a tax and economic issue. Early planning, considering legal issues in Israel and abroad, can save a lot of money and prevent legal complications.

If the law that applies to the asset is French law, not always. In France, inheritance law provisions limit the possibility of disinheriting certain heirs (forced heirs).

Through early planning, which includes drafting a will, utilizing exemptions, giving gifts during your lifetime, and more, you can significantly reduce your tax liability.

In the absence of a will, the inheritance will be divided among the legal heirs according to French inheritance law.

The choice between giving a gift and bequeathing depends on the circumstances of the case. Sometimes a gift will be taxed similarly to an inheritance. Therefore, the legal and tax aspects should be examined before making a decision.

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