Tax liability on the transfer of property through inheritance
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The death of a person must be reported to the Tax and Customs Authority only if that person has bequeathed property to be transferred. Stamp duty is charged on the transfer of such property. When reporting a person’s death, the documents required to declare liability to stamp duty must be submitted.
The death must be reported and liability to stamp duty must be declared at any Tax and Customs Authority service desk or counter, by the end of the third month following the month in which the death occurred. For example, if the person died in March (irrespective of the day), the death must be reported by 30 June.
The death must be reported and liability for stamp duty must be declared by the executor of the estate.
The executor is the person who must deal with all matters relating to the estate until the apportionments are distributed.
The executor must be, in this order:
- the widow or widower, if this person is the heir or is entitled to half of the couple’s estate (marital portion)
- if there is no widow or widower, the administrator of the will, i.e. the person appointed by the deceased to ensure that the will is complied with
- if there is no administrator, the statutory heir who is the closest relative, normally a son/daughter
- if there are no statutory heirs, a testamentary heir, i.e. someone who has been left property in a will.
If there is more than one statutory heir with the same degree of kinship, the family member who has lived with the deceased for at least a year is the executor. If there is more than one person in this situation, the oldest person is the executor. If there is more than one testamentary heir, these same rules apply for determining the executor.
The heirs may, however, choose another person as the executor, provided they all agree.
A death is reported and liability to stamp duty is declared by submitting:
- this completed form
- a list of the assets comprising the estate and their value (schedule of assets. For example:
- bank accounts
- investment funds
- shares and savings certificates
- retirement savings plans and life insurance
- precious metals (gold, silver, precious stones, etc.)
- vehicles, furniture, etc.
- immovables (buildings and land)
- death certificate
- civil identification document and tax identification number of the deceased
- civil identification document and tax identification number of the heirs
- will or deed of gift or justification.
If this responsibility falls to them, the following are exempt from stamp duty:
- the widow or widower (this also applies to couples who were life partners)
- ascendants (parents and grandparents)
- descendants (children and grandchildren).
There are no costs associated to reporting a death and declaring liability to stamp duty.
If there is no exemption from payment of stamp duty, the applicable rate is 10% on the transfer of property by inheritance.
For further information, consult the Tax and Customs Authority information leaflet on gratuitous transfers.