Inheritance tax in Iceland
In Iceland , inheritance tax is levied on the acquirer upon death . In the case of free gifts among the living ( gifts ) there is no gift tax , but such acquisition is subject to income tax .
Legal basis
The inheritance tax was significantly reduced and simplified due to reforms in 1995 and 2004. Previously, the tax was levied at different levels according to three tax classes based on the degree of kinship and within these classes increasing with the value of the inherited estate.
Scope, amount and levying of the tax
Any acquisition due to death from a testator who was resident in Iceland is taxable (inheritance tax). Both movable and immovable property in Iceland and abroad are subject to tax. These are valued at their market value at the time of inheritance, properties in Iceland at their taxable value. A revaluation can also be required of the heir if he believes that the market value is lower than the tax value. The existing burdens as well as the costs of the funeral and the settlement of the estate are deducted from this value.
The tax is set at a fixed rate of 5% of the value of the purchase, although an amount of 1,000,000 Icelandic kroner (approx. 5,500 euros) is tax-free. The tax is payable to the district authority when the estate is processed. Proof of payment is required in order to be able to enter a change of law in public registers.
Spouses and life partners who are legally equivalent to them are exempt from the tax. Other life partners are also excluded if they are covered by a will and the fact of the partnership results from the will.
Gift tax
There is no gift tax, but such gifts are directly subject to income tax . Occasional gifts in the usual scope are also exempt from income tax.
International tax law
Iceland, along with Denmark , Finland , Norway , Sweden and the Faroe Islands, is a participant in the Nordic Agreement on the Avoidance of Double Taxation of Income and Assets . According to this agreement, inheritance tax is due in the country in which the donor lives or the testator has lived. In addition, each country can tax the real estate located in its territory as well as investments in local companies.
See also
Individual evidence
- ^ Page of the Ministry of Finance, loaded January 10, 2010, New laws sponsored by the Minister of Finance, June 24, 2004 (PDF; 170 kB)
- ↑ Page of the Prime Ministry, loaded January 10, 2010: Inheritance Tax, assets and liabilities (English) ( Memento of the original from October 29, 2009 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. ; Page by Lex Mundi, loaded January 10, 2010, Iceland: under Inheritance and Gift Tax (PDF; 104 kB)
- ↑ Page of the Prime Ministry, loaded January 10, 2010: Inheritance Tax, assets and liabilities (English) ( Memento of the original from October 29, 2009 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. ; Rembert Süß: Erbrecht in Iceland, in: Rembert Süß (Hrsg.): Erbrecht in Europa, 2nd edition 2008, Zerb Verlag, Angelbachtal, ISBN 978-3-935079-57-0 , page 826
- ↑ a b page by Lex Mundi, loaded January 10, 2010, Iceland: under Inheritance and Gift Tax (PDF; 104 kB)
