Wealth acquired by inheritance from an individual who has properties in the Netherlands is subject to inheritance tax (recht van sucessie). Several other forms of wealth transfer such as gifts made by the testator within 180 days prior to death and the proceeds of a life insurance contract for which the testator paid the premiums are treated as an inheritance for tax purposes. Property acquired through inheritance is valued at fair market value less liabilities (debts such as tax debts, funeral costs, and other expenses) at the time of the testator´s demise.

Different inheritance tax ratesapply, depending on the relationship between the heir and the beneficiaries:

• Category I - transfers to spouses, cohabitants and children: 10% to 20%
• Category II - transfers to direct descendants in the second or further degree, i.e. grandchildren: 18% to 36%
• Category III - transfers to parents, brothers and sisters, and non-related persons: 30% to 40%