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Luxembourg: Inheritance
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Luxembourg: Inheritance Inheritance tax and lawEstate Tax (Succession and Death Duties)Inheritance is subject to death taxes if the property is obtained from a nonresident. It is taxed at the gross value without any deductions. Rates vary depending on the relationship between the deceased and the heir. INHERITANCE TAX RATES | | RELATIONSHIP | RATE | | Direct Line | 2% | | Between Spouses | 5% | | Between Brothers and Sisters | 6% | | Between Uncle/Aunt and Nephew/Niece | 9% | | Between Grand-uncle/Grand-aunt and Grand-nephew/Grand-niece | 10% | | Between Others | 15% | | Source: Global Property Guide |
Inheritance is subject to succession duties if the property is obtained from a resident of Luxembourg. It is taxed at the net value, deducting all liabilities and allowances. The inheritance of direct descendants and ascendants are exempt from succession duties. The inheritance of a spouse having common children with the deceased is also not subject to tax. Any inheritance whose net worth is less than €1,250 is not taxable.The inheritance is further subject to progressive rates depending on its value. The tax amount based from the preceding computation (taxable inheritance multiplied by a rate according to the degree of relationship) is further multiplied by a rate according to the value of the inheritance. The final amount is then the final tax liability of the heirs. Surtax Depending on the Value of Inheritance | | VALUE OF THE SHARE (€) | INCREASE IN THE RATE (€) | | €10,000 – €20,000 | 1/10 | | €20,000 – €30,000 | 2/10 | | €30,000 – €40,000 | 3/10 | | €40,000 – €50,000 | 4/10 | | €50,000 – €75,000 | 5/10 | | €75,000 – €100,000 | 6/10 | | €100,000 – €150,000 | 7/10 | | €150,000 – €200,000 | 8/10 | | €200,000 – €250,000 | 9/10 | | €250,000 – €380,000 | 12/10 | | €380,000 – €500,000 | 13/10 | | €500,000 – €620,000 | 14/10 | | €620,000 – €750,000 | 15/10 | | €750,000 – €870,000 | 16/10 | | €870,000 – €1,000,000 | 17/10 | | €1,000,000 – €1,250,000 | 18/10 | | €1,250,000 – €1,500,000 | 19/10 | | €1,500,000 – €1,750,000 | 20/10 | | Over €1,750,000 | 22/10 |
Gift TaxGift taxes (registration duties) are levied in Luxembourg regardless of the involved parties’ tax residencies. The rates are as follows: Gift Tax Rates | | CLASSIFICATION OF GIFT | TAX RATE | | Recoverable gifts in direct line | 1.8% | | Non-recoverable gifts in direct line | 2.4% | | Gifts between spouses | 4.8% | | Between brothers and sisters | 6% | | Between uncle/aunt and nephew/niece | 8.4% | | Between great-uncle/-aunt and great-nephew/-niece | 9.6% | | Between unrelated individuals | 14.4% |
Gifts between spouses, brothers and sisters, uncle/aunt and nephew/niece, great-uncle/-aunt and great-nephew/-niece, and between unrelated individuals may acquire reduced rates if it is made in a pre-nuptial agreement.A 50% surcharge is further applied to properties located in Luxembourg City. Real estate gift transfers are also subject to a 1% transcription duty (droit de transcription).
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Source: www.globalpropertyguide.com
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