Luxembourg: Inheritance
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Inheritance tax and law
Estate 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 Tax
Gift 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).
Luxembourg - more data and information
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