Concept
Few taxes vary as wildly across borders as the one on death. In Japan it reaches 55%; in Russia, the UAE and dozens of other jurisdictions it does not exist at all. When assets sit in several countries, geography decides: where the property physically lies and through what structure it is held matters more than the headline rate at the place of residence. The very same portfolio can be taxed at 55% or not at all, depending on the country.
| Country | Rate | Threshold / allowance | Tax nexus |
|---|---|---|---|
| Japan | up to 55% | — | — |
| South Korea | 50% | — | — |
| France | up to 45%, progressive by kinship | — | situs: local real estate — regardless of the owner's residence |
| United States | 40% | $15M — citizens and residents (from 2026); $60,000 — non-residents | citizenship and green card — worldwide; non-residents — US-situs assets |
| United Kingdom | 40% | nil-rate band £325,000 + £175,000 for a main residence (frozen until 2031) | residence: resident 10 of the last 20 years; 3–10-year "tail" after departure |
| Germany | up to 30%, progressive by kinship | — | — |
| Spain | progressive by kinship; varies sharply by autonomous community | — | — |
| Canada, Australia | none, but deemed disposition: capital gains tax on the gain | — | — |
| Russia | none (abolished 2006) | — | — |
| UAE, most offshore centres | none | — | — |
| Sweden, Austria, Norway | none (abolished 2005, 2008 and 2014) | — | — |
| Czech Republic | none (abolished after 2000) | — | — |
| Estonia, Latvia | none (never introduced) | — | — |
Where the Tax Comes From and Where It's Heading
Inheritance tax grew out of the medieval feudal death duties — a payment to the lord for land passing to an heir. In the twentieth century it became a tool of redistribution: after the world wars, rates in Britain and the US reached 70–80%. Then the pendulum swung back: since 2000 a whole series of European countries has dropped the tax — partly because of the flight of capital and family businesses, partly because it is expensive to administer while raising little.
Today only 24 of the 38 OECD countries levy an inheritance or estate tax, and on average it brings in around 0.5% of total tax revenue; it accounts for a meaningful share (above 1%) only in Belgium, France, Japan and Korea. In its 2021 report the OECD defends such taxes as a brake on the concentration of wealth and recommends taxing each heir's share rather than the whole estate at once — precisely the model South Korea moves to from 2028.
High-Tax Countries
The record holder is Japan, the highest rate in the world; then South Korea, and behind them a tight group of France, the US, the UK and Germany. In France, Germany and Spain the scale is progressive and turns on the degree of kinship: a spouse and children pay preferential rates, distant relatives and strangers the maximum. Spain, on top of that, varies sharply by autonomous community — in some the inheritance is almost exempt, in others it is taxed in full.
The US charges estate tax on the whole estate, but for citizens and residents the exemption is enormous — $15 million per person from 2026, made permanent by the One Big Beautiful Bill (OBBBA, US, 2025). For non-residents it is far harsher: on US-situs assets (US shares, US real estate) the exemption is only $60,000, with 40% above it. From April 2025 the UK replaced its domicile test with a residence-based regime: IHT reaches the worldwide assets of anyone who has been tax-resident for 10 of the last 20 years, and after departure the "tax tail" runs a further 3 to 10 years. The nil-rate band of £325,000 plus £175,000 for a main residence is frozen until 2031.
Countries Without Inheritance Tax
The map has many zero rows, but "no inheritance tax" is not the same as "no tax at all". Canada and Australia formally have no such tax, yet the moment of death there counts as a deemed disposition — a notional sale of all assets — and heirs pay capital gains tax on the accumulated gain. A similar twist hides inside other taxes, so a zero rate should always be checked for hidden consequences.
Three Coordinates: Citizenship, Residence, Situs
To see who pays where, the situation breaks into three parts. The first is the attachment to the person: the US pulls the tax by citizenship and green card worldwide, while the UK and most countries go by tax residence or former domicile. The second is situs, the physical location of the asset: French real estate and US shares are taxed in their own country wherever the owner lives — US securities stay US-situs even when they sit in a European broker's account. The third is bilateral treaties for the avoidance of double inheritance tax; there are far fewer of these than ordinary tax treaties, so the same asset is sometimes taxed in two countries at once.
Hence the planning techniques. Real estate in a high-tax country is held through a holding company, turning a "local" asset into shares of a foreign firm. Non-residents swap US shares for non-US fund equivalents or wrap them in a life insurance policy, taking them out of the US-situs net. Trusts and private foundations (foundation, Stiftung) change the legal owner in advance — before situs and residence play against the family.
What This Means for Planning
So the first practical step is the map: where you are tax-resident, where the assets lie and which of them "stick" to a particular country through situs. The structure is chosen to fit that map — a holding company, a trust, a foundation or a policy — together with the regime for lifetime gifts, which in many countries is taxed more gently than inheritance. The earlier all of this is assembled, the fewer surprises heirs face in the form of someone else's 40% tax.
🧭 Check your case: Inheritance Navigator — which law applies, where forced heirship and taxes arise.
This material is for reference purposes and does not constitute individual legal advice.