Inheritance tax and inheritance law in Iceland
February 10, 2016
Inheritance tax in Iceland is imposed not on the estate of the deceased but separately on each beneficiary in respect of their share of the estate. The inheritance of a surviving spouse, as well as a cohabitant (provided the status as a cohabitant is stated in the will) is tax exempt.
The estate is valued at its fair market value at the time of death. Debts of the deceased, including taxes due, funeral expenses and necessary expenses for the estate are deductible from the taxable value of the estate.
The inheritance tax is imposed at a rate of 10% after all allowable expenses are deducted. The first ISK1,500,000 (€10,490) of a beneficiary's share in an estate is not taxable.