Global Property Guide

Financial Information for Residential Property Buyers


Inheritance tax and law

Last Updated: March 24, 2016

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 relationship between the deceased and the heir.

INHERITANCE TAX RATES

RELATIONSHIP RATE
Direct Line exempt
Between Spouses with Children exempt
Between Spouses without Children 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

The inheritance of direct descendants and ascendants are exempt from succession duties, up to the legal limitation. The inheritance of a spouse having common children with the deceased is also exempt from tax. Any inheritance whose net worth is less than €1,250 is exempt from taxation.

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 10%
€20,000 - €30,000 20%
€30,000 - €40,000 30%
€40,000 - €50,000 40%
€50,000 - €75,000 50%
€75,000 - €100,000 60%
€100,000 - €150,000 70%
€150,000 - €200,000 80%
€200,000 - €250,000 90%
€250,000 - €380,000 120%
€380,000 - €500,000 130%
€500,000 - €620,000 140%
€620,000 - €750,000 150%
€750,000 - €870,000 160%
€870,000 - €1,000,000 170%
€1,000,000 - €1,250,000 180%
€1,250,000 - €1,500,000 190%
€1,500,000 - €1,750,000 200%
Over €1,750,000 220%

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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