Inheritance tax
| 3.8 minutes reading time
I often get questions from relatives about the what and how of inheritance tax. It is a subject that relatives would rather not talk about during their grieving process. Nevertheless, it is good to think about this with them, because sooner or later after the funeral they will have to deal with it. In short, I will tell you a bit about how inheritance law works.
What is inheritance tax?
Inheritance tax, also known as inheritance tax, is a tax on inheritances (possessions such as a house, cars, jewellery, money or other property). Inheritance tax is one of the government's revenues that they use to finance public services, such as healthcare, education, public transport and infrastructure.
Who pays inheritance tax?
If you receive an inheritance, you are usually obliged to pay inheritance tax. Inheritance tax depends on the amount of the inheritance and the rules in the country where the deceased lived.
Whether you have to pay inheritance tax depends on your relationship with the deceased. There may be certain exemptions.
Where do you pay inheritance tax?
You pay inheritance tax in the country where your loved one died.
If you have received an inheritance from abroad, do you pay inheritance tax in the Netherlands? Not if one of the following applies.
- The value of your inheritance is lower/equal to your exemption
- The deceased was not a Dutch citizen
- The deceased was a Dutch citizen and had lived outside the Netherlands for more than 10 years
For the specific rules regarding inheritance tax, please refer to the laws and regulations of the country applicable to your situation.
When do you pay inheritance tax?
The Tax and Customs Administration will send a letter stating whether the heirs must file a tax return within 4 months of the death. The letter also states when they expect the declaration back. This date is 8 months after the date of death. If this is not possible, you can request a postponement, but do so before the submission date stated in the declaration letter. You will then receive 1 x 5 months extension. See the specific information and rules regarding deferral and tax interest, among other things:
Postponement of inheritance tax return?
The addressee of the declaration letter is one of the heirs. An executor or an authorised civil-law notary can also complete the inheritance tax return, for example on the basis of the will or a certificate of inheritance.
The Tax and Customs Administration has a tool for calculating Inheritance Tax.
How is inheritance tax calculated?
Inheritance tax is calculated based on the value of everything you inherit, minus any debts the deceased may have at the time of death.
The value of money in a bank account is clear. In the case of assets such as real estate, the value is more difficult to determine.
Example 1
The inheritance includes an owner-occupied home.
As the sole heir to an owner-occupied home, you can occupy, sell or rent it out. If there are multiple heirs, one of them can buy out the others. You will also have to take over the mortgage debt.
Sometimes there is term life insurance that pays off part of the debt/all of the debt after the death. When the property is sold, the inheritance tax will be calculated on the basis of the WOZ value minus the mortgage debt.
If you rent out the property or live in it yourself, you pay income tax/wealth tax.
Example 2
If you inherit a car, the value will be determined on the basis of the ANWB/BOVAG price list.
For other goods, the market value usually applies. The Tax and Customs Administration has guidelines on how the value can be determined.
How much inheritance tax do you pay?
The Tax and Customs Administration has a handy calculation tool to determine how much inheritance tax you have to pay
Please note that this tool does not take into account business succession (when you inherit a business).
If the value of the inheritance is lower/equal to the exemption, you do not pay inheritance tax. When it is higher, yes. The amount of inheritance tax depends on your relationship with the deceased.
Example
If your spouse, registered partner or cohabiting partner dies, an exemption of € 723,526 applies (based on the amount of your exemption in 2023). If the value of the inheritance is lower, you do not pay inheritance tax.
Do you need help with questions about inheritance tax?
Then consult a professional in the field of inheritance tax (such as a notary, tax advisor or an estate planner) or the Tax and Customs Administration.
Tax and Customs Administration: Inheritance and inheritance tax
