The Global Property Guide looks at inheritance from two angles: taxation, and what inheritance laws apply to foreigners leaving property in Ukraine: what restrictions there are and whether making a will is advisable.

INHERITANCE TAX

How high are inheritance taxes in Ukraine?

Inheritance tax is levied on the gross inheritance or the market value of the property. The beneficiary is liable to pay the inheritance tax.

Inheritance or gifts of properties made between spouses who jointly own the property are exempted from inheritance tax.

First degree relatives are parents, spouse, parents of spouse, and children

INHERITANCE LAW

Thanks to Hough, Heidingers, Yablonsky & Partners

What inheritance laws apply in Ukraine?

Ukrainian inheritance laws affect everyone who owns property in Ukraine.

Foreign nationals are not treated differently, nor is any distinction made under the Ukrainian Constitution between foreigners of different nationalities or religions.

Ukrainian law is contained in the following statutes:

• General provisions for Ukrainian inheritance issues are in Book 6 of the Civil Code of Ukraine
• Issues connected with spouses are regulated by The Family Code of Ukraine
• "Concerning International Private Law" regulates issues concerned with foreign elements (i.e. one or more participants is a foreigner; property is situated in a foreign country; or a legal fact took place in a foreign country).
• The Civil Procedure Code of Ukraine regulates issues connected with court cases and hearings in Ukraine.
• The Land Code of Ukraine regulates some issues connected with restrictions on land ownership.
• The Law entitled "Concerning the Legal Status of Foreigners and Persons without Nationality" regulates questions connected with foreigners and persons without nationality that have a temporary or permanent legal residence in Ukraine.

If international agreements or treaties that were ratified by the Ukrainian parliament proclaim legal norms other than Ukrainian law, then the law of the international agreement or treaty prevails over local law.

A local court of general jurisdiction deals with inheritance issues (Law of Ukraine entitled "Concerning the Judicial System of Ukraine", Civil Procedure Code of March 18, 2004). A court should hear a case no later than two months after the opening of proceedings. Case hearings may be prolonged for no longer than one month in exceptional cases (Article 157 of the Civil Procedure Code of Ukraine) but the number of such prolongations is unlimited, and for this reason, court cases may take one or more years to complete.

Ukrainian law stipulates a reserved portion.

There are two ways to inherit property in Ukraine:

• As a matter of law, and/or
• Under the provisions of a will

If there is no will, or the testament is recognized as void, then the beneficiaries inherit "according to law".As a matter of law:

• The first line of legal beneficiaries includes the children, spouse and parents of the deceased.
• The second line includes native brothers, sisters, and grandparents.
• The third includes native uncles and aunts.
• The fourth includes people that lived as a family with a testator for at least five years.
• The fifth includes other relatives, until the sixth cousins.

The first line receives everything in the first instance. If there is no first line, then the second receives everything. If there is no second line then the third line inherits, and so on.

The beneficiaries inherit in equal parts. For example, if the deceased left his whole estate to a wife and a son, then each of them receives 50%.

If there is a will, then the beneficiaries inherit according to the provisions of the will, but respecting the legal requirements that some heirs are entitled to a reserved portion, viz:

Persons who have a right to the reserved portion are:

• Children under the age of 18
• Children over the age of 18 who cannot work
• A widow/widower who cannot work
• Parents who cannot work

If they are not nominated in a will, the above persons inherit half the part they are entitled to receive "as a matter of law".

For example, if a deceased man bequeathed all his estate to his sister, but he also had a son under the age of 18, and a non-working wife, then 25% of his estate would go to his son, 25% to his wife, and 50% to his sister.

It is normal to make a will in Ukraine.

There are two types of wills: Open and Secret.

• An Open Will is written and signed by the testator, and its contents are revealed to a notary, who has the right to attest the will.
• A Secret Will is written and signed, then presented to a notary in a sealed envelope bearing the signature of the testator, so the notary is unaware of its contents.

A notary is not the only person who has the right to attest a will in Ukraine. If there are no notaries in a district, an authorized person (e.g. an official from the municipal self-government board) may attest an Open Will. A commandant of a prison may attest the will of a prisoner, and a chief doctor (or his substitute) may attest the will of a deceased person being treated in hospital.

A foreigner may not own Ukrainian agricultural land.

If a foreigner inherits Ukrainian agricultural land, it must be sold within one year. If the beneficiary does not sell the land, it may be forcefully sold on the basis of a court´s decision; however a foreigner may receive land as rent if he/she has no right to receive the land as property.