Inheritance tax in Luxembourg
In Luxembourg , if the deceased was domiciled there, inheritance tax is due on acquisition upon death , which is levied in the form of an estate tax if a deceased residing abroad inherits property located in Luxembourg. A register tax comparable to the gift tax is levied on notarized free gifts among living persons.
Inheritance tax liability
The inheritance tax liability exists for acquisitions by testators resident in Luxembourg in relation to property located in Luxembourg (land and movable property) as well as for the foreign movable property of the testator; Foreign property is not subject to inheritance tax. If the heir proves that he was levied for inheritance tax on the acquisition of the foreign movable property abroad, the Luxembourg tax liability does not apply in this respect either. Gifts of objects that are generally subject to inheritance tax, which the testator made to the heir within a year prior to his death, are added to the estate, unless the gift was notarized, but a registry tax is due as a result. The purchased items must be valued at their market value. The testator's debts and death costs are deducted from this.
Estate tax
If the deceased was not domiciled in Luxembourg, real estate located in Luxembourg and belonging to his estate is subject to estate tax. In this case, the tax is levied on the basis of the market value of the property, without deduction of estate liabilities, including those that encumber the property.
Register tax
Luxembourg has no actual gift tax. However, donations generally require a form and must be certified by a notary, unless they are so-called hand donations that are carried out directly with the act of donation. Land donations always require notarization. If the notarization also relates to movable property located abroad, this is also subject to register tax.
Tax brackets
All forms of inheritance, estate and register tax are levied depending on the family relationship between the beneficiary and the testator or donor. The following tax classes are created for this purpose:
- Spouses or partners who are linked by a declaration of partnership that was registered more than three years before the date of inheritance (or gift) with common children or such spouses and partners without common children
- Relatives in direct line (parents, children, grandparents, children's children)
- siblings
- Uncles, aunts, nephews, nieces
- Great-uncles, great-aunts, great-nephews and great-nieces
- All other relatives and third parties
Tax rates
When it comes to tax rates, Luxembourg law differentiates between the possible legal reasons for the acquisition, with different rates being used depending on whether the acquisition goes beyond the scope provided by the statutory succession or not. Insofar as straight line relatives do not inherit more than they are legally entitled to, no inheritance tax applies (but not estate or registry tax). The same applies to spouses and civil partners who have been registered for more than three years if they have children with the deceased partner.
The basic tax rates shown in the table below apply. These apply to inheritances up to a value of 10,000 euros. For values in excess of this, tax law creates 22 sections, up to 50,000 euros in 10,000-euro steps, beyond that in larger increments up to 1,750,000 euros, and adds 1/10 to the basic tax rate for each step, which results in the highest tax bracket (distant relatives and third parties) results in a maximum tax rate (for estates greater than 1,750,000 euros) of 48% (15% + 22/10 of 15%). When buying a house used by the testator himself, the surcharges are lower.
| Tax class | Inheritance tax statutory Inheritance |
Inheritance tax > as statutory Inheritance |
Estate tax |
Maximum rate of inheritance and estate tax |
Register tax |
|---|---|---|---|---|---|
| Spouses, life partners with children |
0 | 0 | 5% | 16% | 1.8% |
| Spouses, life partners without children |
5% | 5% | 5% | 16% | 2.4% |
| Children, grandchildren, parents | 0 | 2.5 - 5% | 2% | 16% | 2 % |
| siblings | 6% | 15% | 6% | 19.2% / 48% | 6 % |
| Uncle, aunt, etc. | 9% | 15% | 9% | 28.8% / 48% | 7.2% |
| Great-uncle, great-aunt, etc. | 10% | 15% | 15% | 32 % / 48% | 8.4% |
| Other | 15% | 15% | 15% | 48% | 14.4% |
The municipality of Luxembourg City levies a surcharge of 50% on donations from properties located there.
Tax breaks
Only the spouses and partners who have been registered for more than three years receive an exemption of 38,000 euros, provided they are subject to inheritance tax at all. In general, inheritances under € 1,250 are exempt from inheritance tax. There are no allowances for register tax. There are no allowances or privileges for the transfer of business or other assets. Contributions to communities, public institutions and charitable organizations are taxed at 4%, and to other non-profit institutions and churches at 6%.
General
The inheritance tax return must be submitted by each heir within six months; the deadline is extended to eight months if the testator died in another European country, and in the event of death on other continents to 12 (America) or 24 months (Asia, Africa).
Luxembourg has no double tax treaties in the area of inheritance taxes. As a result, double taxation of assets located abroad is excluded from a Luxembourg point of view through the waiver of the taxation of foreign real estate and, in the case of foreign taxation, of movable assets there.
In 2006 inheritance tax accounted for 0.61% and estate tax with 2.05% of the total tax revenue.
See also
Individual evidence
- ↑ a b Chambre des Employés Privés, Luxembourg : Inheritances and Testaments, page 17f., Archive link ( Memento of the original dated December 2, 2013 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.
- ↑ Chambre des Employés Privés, Luxembourg : Inheritance and Wills, page 17, archive link ( Memento of the original dated December 2, 2013 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.
- ↑ Troll-Gebel-Jülicher: Inheritance Tax and Gift Tax Act , loose-leaf commentary, 37th edition 2009, Vahlen, ISBN 978-3-8006-2402-7 , § 21 ErbStG marginal no. 115 (Luxembourg)
- ↑ See the table in: Chambre des Employés Privés, Luxembourg: Inheritance and Testament, page 18, archive link ( Memento of the original dated December 2, 2013 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.
- ↑ Troll-Gebel-Jülicher: Inheritance Tax and Gift Tax Act , loose-leaf commentary, 37th edition 2009, Vahlen, ISBN 978-3-8006-2402-7 , § 21 ErbStG marginal no. 115 (Luxembourg)
- ↑ Based on Chambre des Employés Privés, Luxembourg : Inheritance and Wills, pages 16-18, archive link ( Memento of the original dated December 2, 2013 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. ; Troll-Gebel-Jülicher: Inheritance Tax and Gift Tax Act , loose-leaf commentary, 37th edition 2009, Vahlen, ISBN 978-3-8006-2402-7 , § 21 ErbStG marginal no. 115 (Luxembourg)
- ↑ Troll-Gebel-Jülicher: Inheritance Tax and Gift Tax Act , loose-leaf commentary, 37th edition 2009, Vahlen, ISBN 978-3-8006-2402-7 , § 21 ErbStG marginal no. 115 (Luxembourg)
- ↑ BDI / vbw / Deloitte series on inheritance tax reform, edition VI, September 24, 2007, international comparison, location competition, p. 8, PDF ( page no longer available , search in web archives ) Info: The link was automatically marked as defective. Please check the link according to the instructions and then remove this notice.
- ↑ Troll-Gebel-Jülicher: Inheritance Tax and Gift Tax Act , loose-leaf commentary, 37th edition 2009, Vahlen, ISBN 978-3-8006-2402-7 , § 21 ErbStG marginal no. 115 (Luxembourg)
- ↑ BDI / vbw / Deloitte series on inheritance tax reform, edition VI, September 24, 2007, international comparison, location competition, p. 7, PDF ( page no longer available , search in web archives ) Info: The link was automatically marked as defective. Please check the link according to the instructions and then remove this notice.
literature
- Troll-Gebel-Jülicher: Inheritance Tax and Gift Tax Act , loose-leaf commentary, 37th edition 2009, Vahlen, ISBN 978-3-8006-2402-7 , § 21 ErbStG marginal no. 115 (Luxembourg)
