Gift and inheritance tax in the Netherlands

Anyone who lives or has lived in the Netherlands may be subject to Dutch gift and inheritance tax. In this article, Taxsight explains how the gift and inheritance tax in the Netherlands is applied.

Gift and inheritance tax in the Netherlands

Netherlands gift tax is applicable on a gift made by any Dutch resident to another person. It does not matter whether the person receiving the gift lives in the Netherlands or abroad.

Inheritance tax applies when a Dutch resident dies. Dutch inheritance tax also applies when the beneficiaries live outside the Netherlands.

Dutch gift and inheritance tax may also apply if a person previously resided in the Netherlands. Other situations where Dutch gift or inheritance tax might apply include:

  • Dutch citizen donates or dies within 10 years of leaving the Netherlands
  • A person of any other nationality makes a donation within one year of leaving the Netherlands

Rate of gift and inheritance tax

The general rates of gift and inheritance tax are the same. The prices are:

  • Children and partners: 10 percent up to 128,750 euros and 20 percent on the surplus
  • Grandchildren: 18% up to 128,750 euros and 36% on the surplus
  • Anyone else: 30 percent up to 128,751 euros and 40 percent on the surplus

Gift and inheritance tax exemptions

Several exemptions from gift and inheritance tax may apply. Below, we describe the exemptions from gift tax, as well as inheritance tax.

General gift tax exemptions

The general exemption from donation tax to any person is 3,244 euros (2021). The general gift tax exemption can be used every year.

The general exemption from the gift tax between parents and children is 6.604 euros (2021). The exemption is applicable each year. Therefore, a parent can donate on an annual basis.

Additional exemptions between parents and children

In addition to the general gift tax exemption, parents can give an additional tax-free gift to children between the ages of 18 and 40.

The following additional exemptions can only be claimed once in a lifetime:

  • A parent can grant once in their life an amount of 26.881 euros for the highest gift tax exemption.
  • The exemption of 26,881 euros can be increased up to 55,996 euros provided the donation is used for an expensive study.

Gift tax exemption for the purchase of a main residence

Anyone can grant a parent or non-parent aged 18 to 40 an amount of 105,302 euros excluding donation rights, provided that the gift is used for:

  • Buying a house that will become a primary residence
  • Repayment of a loan on a home that is a principal residence
  • The renovation of a house that is considered a primary residence

Inheritance tax exemptions

The inheritance tax exemptions in the Netherlands are as follows:

  • 21,282 euros on inheritances from parents to children / grandchildren
  • 2,208 euros on the estates of any other person
  • 671,910 euros between tax partners
  • 50,397 euros on inheritance from children to their parents
  • 63,836 euros from parents to their disabled child

Corporate gift and inheritance tax

In the case of a corporate gift or inheritance, there are special rules and tax exemptions. Some of the conditions for exemption are:

  • This is an active business and not a passive business
  • The previous owner must have the business for at least five years in the event of donation and at least one year in the event of death
  • The person who took over the business must remain the owner of the business for at least five years.

In addition to the exemption from gift or inheritance tax, potential income tax can be passed on to the new owner.

Need help with gift tax, inheritance or any other tax situation? Contact Taxsight for experienced and reliable tax advice.

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