Inheritance tax implications for Dutch and non-Dutch residents

What is taxed under Dutch Inheritance Tax?

According to the Dutch Inheritance Tax (schenk- en erfbelasting), inheritance of property from a person who was a resident (or deemed resident) in the Netherlands at the time of death, will be taxed. Inheritance Tax is payable by the recipient on the deceased’s worldwide estate.

If non-resident at the time of your death, you will not be subject to Dutch inheritance tax on your worldwide estate, including Dutch Real Estate.

What is taxed under Dutch  Gift Tax?

Any transfer of property made by gift (or deemed gift) by a person who was a resident (or deemed resident) in the Netherlands at the time of the gift, will be taxed.

Dutch residency status is based on an evaluation of all the facts and circumstances.

Dutch nationals are deemed to be a resident for IHT and Gift Tax purposes for 10 years after emigration. For those who are not Dutch nationals, for gift purposes, this period is reduced to one year and, for IHT purposes, there is no period after emigration as IHT is not chargeable to non-residents.

Tax classes for Dutch IHT and Gift Tax

The tax rate depends on the relationship between the deceased (donor) and their heirs (donees).

Tax class I: - Spouse and registered partners:

• An adult heir who had a municipally registered joint household with the deceased for at least six months before death (two years where a gift is made) and with whom a notarial cohabitation agreement was drawn up, which contained a mutual duty of care;
• If a notarial agreement with mutual duty of care is not available, the person with whom the deceased kept a municipally registered joint household for a period of at least five years;
• Children and stepchildren.

Tax class II:  Descendants of children and stepchildren

Tax class III: All others (i.e., parents, siblings, also partners who do not qualify as a partner for Tax Class I)

Tax rates for Dutch IHT and Gift Law