FRECUENTLY ASKED QUESTIONS
Inheritance in The Netherlands
The inheritance or succession tax ( erfbelasting ) is a tax that applies to residents and non-residents who have received an inheritance from a Dutch citizen. Non-residents have the option of availing themselves of the inheritance law of their country of origin. The inheritance tax will depend on the relationship you had with the deceased, for example it was your father, mother, husband, wife, etc.
This tax will increase if the relationship with the relative or person who gave you the inheritance is less direct.
That depends on whether you have a will, then the heirs will be determined. If you do not have a will, inheritance law determines who the heirs are.
Inheritance law divides heirs into 4 groups and they inherit in the following order:
- Spouse, registered partner, and own children (not adoptive or stepchildren). If your children are no longer alive: your grandchildren.
2. Parents, brothers and sisters. If your brothers and sisters are no longer living: their children.3. grandparents4. grandparents
If there are no heirs at all, then the inheritance will go to the state.
The Belastingdienst sends you a letter indicating whether the heirs must file a declaration, this is done within 4 months of death. The letter also indicates when they should send the return. The declaration letter is sent to 1 of the heirs, usually the partner or eldest child of the deceased. Unless it has been communicated that another heir is the contact person.
If the estate will shows that there is an executor or a civil notary authorized to complete the inheritance tax declaration, then the tax declaration letter will be sent to that executor or authorized representative.
You should always file the tax return, if you inherit more than the exempt amount
Because then you have to pay inheritance tax.
Is there an executor named in the will? In that case, the executor will file an inheritance tax return for all heirs.
Has no executor been appointed or is there no will? Then the heirs can choose:
– Each heir files for himself. – Some heirs file a return together and some just for themselves. – The heirs jointly choose who will file a tax return for all the heirs. This last option is the most convenient. Because then you can see in the income statement if you declare 100% of the inheritance together. So not too much and not too little.
-If the deceased lived in the Netherlands and his inheritance is higher than his exemption. Check the following page about waivers
-If the deceased was Dutch, lived outside the Netherlands for less than 10 years and the value of his inheritance is greater than his exemption.
When someone dies, their inheritance passes to the heirs. An estate consists of all assets and debts left by the deceased. Heirs are people or institutions that receive something from the deceased’s estate, such as an amount of money or a valuable object, as a result of death.
If you don’t write a will yourself, probate law will determine who will receive your inheritance. But you can fix things yourself during your lifetime:
– With a will you determine what happens to your possessions.
– By making donations during your lifetime, you ensure a smaller inheritance. – For questions about inheritance or making a will, visit www.notaris.nl – At the Central Register of Wills ( Centraal Testamentenregister ) can find out if the deceased has made a will and which notary has it.
You must have this recorded in the will, by a civil law notary.
In that case, it allows 1 or more heirs to ‘inherit freely’ or ‘inherit net’. This means that the heir does not pay any inheritance tax. Your other heirs then pay inheritance tax for that heir from the rest of your estate. Inheritance tax must be paid.
You do not pay inheritance tax in the Netherlands if one of the following applies:
- The value of your inheritance is less than or equal to your waiver, check the following page about waivers:
- The deceased was not Dutch
- The deceased was Dutch but also lived outside the Netherlands for more than 10 years.
If you donate part of your inheritance, it becomes smaller and as a result, your heirs will pay less inheritance tax after your death.
Yes but that depends on whether you want a delay of 4 months or more.
- a) If you want a 4-month deferral
You can obtain a 4-month extension from the final payment date of the evaluation if you meet the following conditions:
– Your total outstanding debt with the Treasury does not exceed €20,000.
You do not have to account for a tax debt against which you have objected and for which you have been granted a deferral of payment.– You have never been denied a deferral of payment due to payment problems or settlement with tax refund.– You have no assessments pending for which you have received an execution order.– Are you an entrepreneur? So there is one more condition. That is, you have always filed a tax return on time.
- b) Do you want a deferral of more than 4 months?
That is also possible. In this case, a deferral of payment is requested in writing. In your letter you make a payment arrangement proposal and indicate at the latest when you will pay the installments of your debt. Your letter must say:
– The assessment number (you will find this number on the assessment)
– Your name, address and phone number – Why you want a deferment – In how many installments you want to pay An installment agreement can last up to 12 months. As long as your application is being processed by us, we will not take any collection action.
You will receive a letter from the Belastingdienst within 8 weeks stating whether they have reached a payment agreement with you and what the conditions are for this.
Then you may not be able to pay the inheritance tax on time. For example, because the house is for sale, but it has not been sold yet and you do not have enough money to pay the inheritance tax. You can request a deferral of payment in writing. It doesn’t matter if you already have access to the house now or later. It must be indicated in the letter:
– The assessment number
– The amount you have to pay – Why you cannot pay the inheritance tax on time – How long you want a deferral
This can be more than 12 months. Whether the Belastingdienst can really postpone that long depends on them. For example, they will check to see if you have paid your taxes on time in the past. You will then receive a written response within 8 weeks. Sometimes they add certain conditions, that is, they ask for a guarantee, for example a mortgage right or a bank guarantee.
If you inherit money, it doesn’t count as income, like wages or benefits. However, it counts as active. This means that if you receive an inheritance during the year, it will not affect that year’s allowance. If you receive a high-value inheritance, you have to see the value of the inheritance as of January 1 of the following year and check whether it is up to you to cancel the subsidies or aid you receive.
So that also counts as assets for the grants. They will see it as asset value on January 1 of the following year.
(A) That depends on a number of factors:
- Are you the sole heir or not?
Do you have exclusive rights to the home? So you can, for example, choose to keep the house: live it yourself or rent it out. You can also sell the house. Are there several heirs? So you can, for example, sell the house and divide the estate into money. 1 of the heirs can also buy the house and buy the part of the other heirs. Therefore, several options are possible.
- Is there another mortgage?
If you unconditionally accept the inheritance, you are also responsible for the debts. And therefore also for a mortgage that is still on the house. Sometimes a term life insurance policy is also tied to the mortgage. If you pay, the mortgage can be paid in full or in part. Your mortgage lender can provide you with more information on this.
- Who lives in the house?
The will can state that 1 heir can live in the home. This will then receive the ‘usufruct’ of the house. The person does not own the house, but can live in it without having to pay a fee to the owner. The other heirs then receive ‘bare ownership’ of the house. That is to say: they are the owners of the house, but they cannot live in it themselves and they cannot sell it, demolish it or give it away.
(B) What taxes apply
If you inherit a house, you may face the following taxes:
- Inheritance tax
For the inheritance tax of a home, we assume the value WOZ(opens in a new window) less the mortgage debt. You can choose which WOZ value to report on your tax return: either list the WOZ value in the year of death or the WOZ value in the year after death.
- Income tax
The income tax on the house depends on whether you are going to live in the house, rent it out or leave it empty. If you are going to live in the house, you indicate it in box 1. Are you not going to live in it yourself? Then the rate is applied in box 3
You cannot deduct funeral expenses on your income tax return, but some funeral expenses are deductible for inheritance tax purposes. We have listed the costs for you.
(A) Deduct burial expenses on your estate tax return
On your estate tax return, you can deduct the normal costs of a funeral or cremation, for example: – Clothing and care of the deceased – Obituary notices, flowers , condolence register and (postage) mourning cards and thank you cards – Urn or casket, grave or other resting place, headstone and headstone places – Coffee table – Renting the auditorium – Memorial service or religious service (rental and speaker costs) up to 1 year after death
A funeral insurance payment must be deducted from the costs
Does the funeral insurance cover (part of) the costs? Funeral costs can then be reduced by the amount the insurance company has paid. Will the insurance company pay more than the actual cost of burial or cremation? Then you must record that extra amount on your inheritance tax return.
No, you do not have to pay inheritance tax on annuity or pension payments. This also applies if the annuity or pension payment you already received has increased due to the death of your partner.
- The (higher) benefit may mean you have to pay more inheritance tax.
This is because your partner’s exemption is reduced to half the value of your future benefit entitlements. This is also known as pension imputation. The exemption of partners in 2022 is 680,645 euros. That amount will therefore be less due to the imputation, but you will always be entitled to a minimum exemption, no matter how high your survivor’s pension may be. In 2022, your minimum exemption is 175,837 euros. You do not pay inheritance tax if your inheritance remains under the exemption.
- We deduct part of the value of your future entitlements from your exemption
We determine the value of your future entitlements based on the annual amount of your benefits and a multiplier. That factor depends on your age when your partner died. The older you are at the time of death, the smaller the factor.
Tax interest is calculated in an inheritance tax assessment if:
– The inheritance tax declaration is filed after the date indicated in the return letter, this date being approximately 8 months after the date of death, unless there is a special situation.– The inheritance tax declaration is incorrect or incomplete– It is deviate from your inheritance tax declaration in the final evaluation
Tax interest is not charged for deaths from January 1, 2017 to December 31, 2020.
You will receive tax interest back if you paid tax interest on your estate tax assessment and it later turns out that this assessment was too high. The interest you receive is the interest you paid on the amount you receive. Inheritance tax will be refunded if:
– The final settlement of the inheritance tax is lower than the provisional settlement
– You are right in your objection that the assessment was too high – The Belastingdient agrees with your request for inheritance tax reduction.
You object with a letter. Do this within 6 weeks of the evaluation date. Send your objection to the address indicated in the evaluation.
You will receive a response from us within 12 weeks of the evaluation date.
If you or another heir has received a tax return letter from us, then you must file a return. Do it before the date indicated in the declaration letter. This filing date is approximately 8 months after the date of death.
Have you forgotten? Then the Belastingdienst will send you a reminder. If after this reminder you do not file or if you file too late, you will have to pay a penalty .
- Tax interest
Keep in mind that tax interest is calculated if the declaration is presented after 8 months after the date of death. They also charge tax interest if your inheritance tax return is incorrect or incomplete and if we deviate from your return in the final assessment.
They do not charge tax interest for deaths from January 1, 2017 to December 31, 2020.
- And when do I run the risk of being fined?
In addition to a penalty for non-compliance, there is also a penalty for a misdemeanor. We may impose this if you deliberately do not file a tax return. Or intentionally incorrect or incomplete. You will also be penalized if we send you an additional evaluation after it appears that your previous evaluation was too low, because you: – Intentionally provided incorrect or incomplete information, or – You provided incorrect or incomplete information due to gross negligence – Through “negligence” serious” we mean that you have been culpably careless or negligent.
Because inheriting across national borders implies different rules. Some countries do not charge inheritance tax. Or only if, for example, you inherit a house. So it depends on which country you live in or whether you have to file a tax return, and where you have to file a tax return: in the Netherlands or your country of residence.
Because inheritance tax rules are different in every country, unfortunately, it is not possible to explain how the rules work in each country. It is better to research what the inheritance tax legislation is in the country where you live.
In that case, you declare that on your inheritance tax return in the Netherlands. Because perhaps the Netherlands has a tax treaty with your country of residence to avoid double taxation. We then settle the tax abroad with the Dutch inheritance tax.
You can apply for this exemption if you have inherited a foreign-registered motor vehicle from abroad.