Inheritance tax and law

January 10, 2019

Estate Tax (Succession and Death Duties)

Inheritance is subject to inheritance tax. It is taxed at the net value, deducting all liabilities and allowances. Rates vary depending on the taxable inheritance value and the relationship between the deceased and the heir.

CLASS CATEGORY

Class Description
Class 1 transferees in the direct line; spouses and registered partners (of more than three years’ conjugal status) with issue in common
Class 2 spouses and registered and registered partners (of more than three years’ conjugal status) with no issue in common
Class 3 siblings
Class 4 avuncular relations (i.e. uncles, aunts, nephews, nieces), and adoptive parents and children
Class 5 grand-avuncular relations (i.e. great-uncles, etc.) and adoptive grandparents and grandchildren
Class 6 all other transferees
Source: Global Property Guide

INHERITANCE TAX

Taxable Value, (€) Tax Rate (%)
  Class 1 Class 2 Class 3 Class4 Class 5 Class 6
Up to 10,000 0.0 5.0 6.0 9.0 10.0 15.0
10,001 – 20,000 0.0 5.5 6.6 9.9 11.0 16.5
20,001 – 30,000 0.0 6.0 7.2 10.8 12.0 18.0
30,001 – 40,000 0.0 6.5 7.8 11.7 13.0 19.5
40,001 – 50,000 0.0 7.0 8.4 12.6 14.0 21.0
50,001 – 75,000 0.0 7.5 9.0 13.5 15.0 22.5
75,001 – 100,000 0.0 8.0 9.6 14.4 16.0 24.0
100,001 – 150,000 0.0 8.5 10.2 15.3 17.0 25.5
150,001 – 200,000 0.0 9.0 10.8 16.2 18.0 27.0
200,001 – 250,000 0.0 9.5 11.4 17.1 19.0 28.5
250,001 – 380,000 0.0 11.0 13.2 19.8 22.0 33.0
380,001 – 500,000 0.0 11.5 13.8 20.7 23.0 34.5
500,001 – 620,000 0.0 12.0 14.4 21.6 24.0 36.0
620,001 – 750,000 0.0 12.5 15.0 22.5 25.0 37.5
750,001 – 870,000 0.0 13.0 15.6 23.4 26.0 39.0
870,001 – 1,000,000 0.0 13.5 16.2 24.3 27.0 40.5
1,000,001 – 1,250,000 0.0 14.0 16.8 25.2 28.0 42.0
1,250,001 – 1,500,000 0.0 14.5 17.4 26.1 29.0 43.5
1,500,001 – 1,750,000 0.0 15.0 18.0 27.0 30.0 45.0
Above 1,750,000 0.0 16.0 19.2 28.8 32.0 48.0

Gift Tax

Gift taxes (registration duties) are levied in Luxembourg for all gifts made in writing or that requires registration. Gifts of immovable property are required to be registered. The rates vary depending on the relationship between the donor and the beneficiary.

Gift Tax

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 be taxed at reduced rates if it is made in a pre-nuptial agreement.

Real estate gift transfers are also subject to a 1% transcription duty (droit de transcription).

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