# inheritance-estate-gift-matrix

## Inheritance / Estate / Gift Tax Matrix v0.1

## What this file is

**This file is a content skill that loads on top of `cross-border-workflow-base`.** It maps the world's principal transfer taxes on death and gift, as of mid-2025.

**Tax year coverage.** Current for **calendar 2025**, reflecting:
- **US OBBBA** (P.L. 119-21, July 2025) — confirms unified gift / estate / GST exemption at USD 13.99m (2025), rising to ~USD 15m per OBBBA's permanent extension of TCJA increase
- **UK IHT** — frozen nil-rate band at GBP 325,000 and residence nil-rate band at GBP 175,000 through April 2030; **domicile concept replaced by long-term residence from 6 April 2025** under FA 2025
- **German Erbschaftsteuer** — Bundesfinanzhof July 2024 ruling on business property relief constitutionality; rates and brackets per ErbStG as last amended
- **French droits de succession** — unchanged rates; Pacte Dutreil at 75% reduction
- **Spanish ISD** — strong regional variation; some autonomous communities (Andalucía, Madrid) effectively reduce to 0% via rebates; national surcharge mechanics
- **Italian successioni** — generous spouse / child exemptions; ongoing parliamentary discussion of rate increases

**The reviewer is the customer of this output.** Cross-border succession is one of the most error-prone areas of practice. Every output must be reviewed by a credentialed local tax / estate planning practitioner before any return is filed.

## Section 1 — Scope statement

This skill covers:

- **Inheritance tax** (paid by beneficiary) — German, French, Spanish, Italian, Belgian, Dutch, Japanese model
- **Estate tax** (paid by estate) — US, UK model
- **Gift tax** — unified with estate/inheritance (US) or separate (FR, DE)
- **Generation-Skipping Transfer (GST) tax** — US-specific
- **Cross-border situs rules** and double taxation treaties (limited bilateral coverage)

This skill does NOT cover:

- **Probate procedure** and grant-of-representation mechanics
- **Trust administration tax** beyond a reference
- **Will drafting** and conflicts of law (e.g., EU Succession Regulation 650/2012 forum rules)
- **Income tax on inherited assets** post-death — see country income tax skills

## Section 2 — United States (federal estate, gift, GST)

### 2.1 Unified exemption (2025)

- **Basic exclusion amount (BEA)** — USD 13,990,000 USD (per individual (2025))  _([T1] Per OBBBA (P.L. 119-21))_
- **BEA rising** — ~USD 15,000,000 USD (from 2026 under OBBBA's permanent extension)  _([T1] Per OBBBA (P.L. 119-21))_
- **Portability** — Married couple portability: surviving spouse can use deceased spouse's unused exclusion (DSUE)  _([T1] Per OBBBA (P.L. 119-21))_
- **GST exemption** — same amount as BEA  _([T1] Per OBBBA (P.L. 119-21))_

### 2.2 Rate

- **Top estate/gift/GST rate** — 40% % (flat top rate above the exemption (graduated brackets 18-40% but most transfers hit the top rate due to lifetime exhaustion of lower brackets via prior gifts))  _([T1])_

### 2.3 Annual gift exclusion

- **Annual gift exclusion** — USD 19,000 USD (per donor per donee for 2025 (indexed))
- **Spousal annual exclusion for non-US-citizen spouse** — USD 190,000 USD (2025; raised from USD 175k)
- **Educational and medical exclusion** — unlimited if paid directly to institution

### 2.4 Marital and charitable deductions

- **Marital deduction** — Unlimited marital deduction for US citizen spouse
- **Charitable deduction** — Unlimited charitable deduction for qualified §501(c)(3) recipients

### 2.5 Non-US residents (estate)

- **NRA situs assets subject to estate tax** — US-situs assets subject to estate tax (real estate in US, US-domiciled corporation shares including foreign corporation US-business income, tangible personal property in US)  _([T1] Non-resident aliens (NRAs))_
- **NRA exemption** — USD 60,000 USD (treaty may increase)  _([T1] Non-resident aliens (NRAs))_
- **NRA top rate** — 40% %  _([T1] Non-resident aliens (NRAs))_
- **Treaties** — Treaties exist with: Australia, Austria, Canada (under §2056A protocol), Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, Netherlands, Norway, South Africa, Sweden, Switzerland, UK  _([T1] Non-resident aliens (NRAs))_

### 2.6 Filing

- **Form 706** — Estate
- **Form 706-NA** — Non-Resident Alien Estate
- **Form 709** — Gift
- **Filing deadline** — 9 months from date of death (estate); 15 April following year of gift
- **DSUE election** — must be made on a Form 706 even if no tax due

### 2.7 Step-up in basis (income tax interaction)

- **§1014 step-up in basis** — inherited assets receive a step-up in basis to FMV at date of death. Critical for capital gains planning. Note: some carryover basis rules apply where modified estate tax regime elected.  _([T1] §1014)_

## Section 3 — United Kingdom — Inheritance Tax (IHT)

### 3.1 Major reform: domicile → long-term residence (6 April 2025)

- **FA 2025 domicile replaced by long-term residence (LTR)** — **Long-term resident**: UK tax resident in at least 10 of preceding 20 years. **Long-term residents are subject to IHT on worldwide assets** for 10 years after losing LTR status. **Non-LTR individuals**: IHT on UK-situs assets only. Previously, non-UK domiciled individuals could shelter foreign assets via "excluded property trusts" — these largely lose their effectiveness for individuals settling after 6 April 2025.  _([T1] FA 2025)_

### 3.2 Rates and exemptions

- **Nil-rate band (NRB)** — GBP 325,000 GBP (frozen through April 2030)  _([T1])_
- **Residence nil-rate band (RNRB)** — GBP 175,000 GBP (for qualifying residential property passing to direct descendants (tapered above estates of GBP 2m))  _([T1])_
- **Spousal exemption** — unlimited (UK-domiciled or LTR spouse); GBP 325,000 limit for non-LTR/non-domiciled spouses  _([T1])_
- **Charitable exemption** — unlimited  _([T1])_
- **Standard rate** — 40% % (above NRB (and RNRB) — reduced to 36% if 10%+ of net estate goes to charity)  _([T1])_
- **Lifetime gift rate** — 20% % (if chargeable lifetime transfer; 40% on death within 7 years subject to taper (the "7-year rule"))  _([T1])_

### 3.3 Reliefs

- **Agricultural Property Relief (APR)** — 100% for owner-occupied farmland (50% for tenanted); post-April 2026 cap of GBP 1m of combined APR + BPR before the rate halves
- **Business Property Relief (BPR)** — 100% for unquoted trading business shares; 50% for quoted controlling shareholdings; same GBP 1m cap from April 2026
- **Quick succession relief** — tapered for transfers within 5 years

### 3.4 Filing

- **Form IHT400** — estate exceeding NRB
- **Form IHT205** — smaller estates
- **IHT due date** — 6 months from end of month of death
- **Form C5** — for Scotland confirmation

## Section 4 — Germany — Erbschaftsteuer / Schenkungsteuer

### 4.1 Three classes of beneficiary

**Three classes of beneficiary (ErbStG §15)**  _([T1] ErbStG §15)_

| Class | Relationship |
| --- | --- |
| **I** | Spouse, registered partner, children, stepchildren, grandchildren, parents (on death only) |
| **II** | Siblings, nieces/nephews, in-laws, divorced spouses, parents on lifetime gift |
| **III** | All others |

### 4.2 Personal exemptions

**Personal exemptions (§16 ErbStG)**  _([T1] §16 ErbStG)_

| Beneficiary | Exemption |
| --- | --- |
| Spouse / registered partner | EUR 500,000 |
| Children (per child) | EUR 400,000 |
| Grandchildren (per child) | EUR 200,000 |
| Parents (death only) | EUR 100,000 |
| Class II | EUR 20,000 |
| Class III | EUR 20,000 |

- **Renewal** — Per donor per beneficiary; renews every 10 years.

### 4.3 Rates

**Rates (§19 ErbStG — graduated by amount and class)**  _([T1] §19 ErbStG)_

| Net amount (after exemption) | Class I | Class II | Class III |
| --- | --- | --- | --- |
| ≤ EUR 75,000 | 7% | 15% | 30% |
| ≤ EUR 300,000 | 11% | 20% | 30% |
| ≤ EUR 600,000 | 15% | 25% | 30% |
| ≤ EUR 6,000,000 | 19% | 30% | 30% |
| ≤ EUR 13,000,000 | 23% | 35% | 50% |
| ≤ EUR 26,000,000 | 27% | 40% | 50% |
| > EUR 26,000,000 | 30% | 43% | 50% |

### 4.4 Business property relief (§§13a, 13b ErbStG)

- **Verschonungsabschlag (relief deduction)** — 85% standard relief for qualifying business assets (Regelverschonung); 100% optional relief (Optionsverschonung) if administrative-asset ratio ≤ 20%; Holding-period and payroll requirements (5 years for 85%; 7 years for 100%); BFH 27 May 2024: confirmed need for partial restriction on company-size grounds; transitional rules pending  _([T1] §§13a, 13b ErbStG)_

### 4.5 Filing

- **Erbschaftsteuererklärung** — due 3 months after notification (Finanzamt typically requests within 4-6 months of death)
- **Schenkungsteuererklärung** — due 3 months after gift becomes known to Finanzamt

## Section 5 — France — Droits de succession / donation

### 5.1 Relationship-based rates

- **Spouse / PACS partner** — 100% exempt on death.  _([T1] CGI Article 777)_

**Children, parents (each child / parent has separate allowance + rates)**  _([T1] CGI Article 777)_

| Net portion (after allowance) | Rate |
| --- | --- |
| ≤ EUR 8,072 | 5% |
| ≤ EUR 12,109 | 10% |
| ≤ EUR 15,932 | 15% |
| ≤ EUR 552,324 | 20% |
| ≤ EUR 902,838 | 30% |
| ≤ EUR 1,805,677 | 40% |
| > EUR 1,805,677 | 45% |

- **Siblings** — 35% to EUR 24,430; 45% above.  _([T1] CGI Article 777)_
- **Nieces/nephews** — 55%  _([T1] CGI Article 777)_
- **Cousins or unrelated** — 60%  _([T1] CGI Article 777)_

### 5.2 Allowances

- **Spouse / PACS** — 100% on death; EUR 80,724 on lifetime gift
- **Children, parents** — EUR 100,000 per parent-to-child relationship; renews every 15 years
- **Grandchildren** — EUR 31,865 per donor; renews every 15 years
- **Disabled persons** — additional EUR 159,325
- **Siblings** — EUR 15,932 (life-living-together additional rules)
- **Other relatives / unrelated** — limited

### 5.3 Pacte Dutreil (CGI Article 787 B)

- **75% reduction on the taxable value of qualifying business shares** — 2-year prior commitment to retain shares (held collectively); 4-year individual commitment after transmission; Family member must continue an executive function for 3 years; Reduces effective French succession tax on family businesses by 75%  _([T1] CGI Article 787 B)_

### 5.4 Filing

- **Déclaration de succession** — due 6 months from death (12 months if deceased died abroad); Submitted to local Service de l'enregistrement; Payment terms: 5-10 years installment for family businesses

## Section 6 — Spain — Impuesto sobre Sucesiones y Donaciones (ISD)

### 6.1 Highly variable by autonomous community

- **Regional administration** — ISD is regulated nationally (Ley 29/1987) but administered by each Comunidad Autónoma, which can modify allowances, rates, and rebates. Some autonomous communities effectively eliminate ISD via 99-100% rebates (Madrid, Andalucía, Murcia, Cantabria for Group I/II); others retain full national rates.  _([T1])_

### 6.2 National default schedule

**Four groups of relationship**  _([T1])_

| Group | Relationship |
| --- | --- |
| I | Descendants < 21 |
| II | Descendants ≥ 21, ascendants, spouse |
| III | Siblings, in-laws, nieces/nephews, ascendants/descendants by affinity |
| IV | All others |

- **National default allowances (modified by autonomous communities)** — Group I: EUR 15,956 + EUR 3,990 per year < 21 (max EUR 47,858); Group II: EUR 15,956; Group III: EUR 7,993; Group IV: 0; Disabled persons: EUR 47,859 (≥33% disability) or EUR 150,253 (≥65% disability)  _([T1])_
- **National default rate schedule** — CC: 7.65% to 34% with multipliers by Group; effective top rate ~81.6% for Group IV taxpayers  _([T1])_

### 6.3 Major reliefs

- **Business inheritance** — 95% reduction (national) when relevant inheritance taxes apply; conditional on continuation
- **Habitual residence** — 95% reduction up to certain limits
- **Family operations** — pacto sucesorio (heredamientos) in Cataluña and Balearic Islands receives favorable treatment

### 6.4 Regional examples (illustrative; verify current law)

**Regional examples**

| CCAA | Group I/II rebate | Notes |
| --- | --- | --- |
| **Madrid** | 99% rebate on tax due | Effectively eliminates ISD for direct family |
| **Andalucía** | 99% rebate Group I/II | Effective elimination |
| **Murcia** | 99% rebate Group I/II | Effective elimination |
| **Cantabria** | 99% rebate (Group I < 22) | Effective elimination |
| **Cataluña** | Reduced bonificaciones (slow phaseout); 99% rebate Group I/II up to EUR 100k; reduced thereafter | Material tax for large estates |
| **Galicia** | 99% Group I (up to EUR 1m); reduced bonifications above | n/a |

### 6.5 Filing

- **Model 660 and Model 650** — Model 660 (Declaración) and Model 650 (Autoliquidación) of the relevant CCAA; 6 months from death (extendable 6 more months)

## Section 7 — Italy — Imposta sulle successioni

### 7.1 Generous spouse / child exemptions

- **Spouse and direct line** — EUR 1,000,000 exemption each  _([T1] D.Lgs. 346/1990)_
- **Siblings** — EUR 100,000 each  _([T1] D.Lgs. 346/1990)_
- **Other relatives within 4th degree** — 0 exemption  _([T1] D.Lgs. 346/1990)_
- **Disabled beneficiaries** — EUR 1,500,000  _([T1] D.Lgs. 346/1990)_

### 7.2 Rates

**Rates above exemption**

| Relationship | Rate above exemption |
| --- | --- |
| Spouse, direct line | 4% |
| Siblings | 6% |
| Other relatives to 4th degree | 6% |
| Unrelated | 8% |

### 7.3 Filing

- **Dichiarazione di successione** — due 12 months from death; Asset-by-asset valuation with cadastral values for real estate; FMV for movable; Periodic parliamentary discussion of rate increases / threshold reductions

## Section 8 — Belgium, Netherlands, Japan, Denmark, Switzerland

### 8.1 Belgium — three regions

- **Regional inheritance tax** — Inheritance tax is regional (Flanders, Wallonia, Brussels-Capital). Rates vary materially.  _([T1])_
- **Flanders direct-line example** — 3% to EUR 50,000; 9% from EUR 50,000 to 250,000; 27% above EUR 250,000; Spouse exemption for movable property: EUR 50,000  _([T1])_

### 8.2 Netherlands

- **Erfbelasting spouse exemption** — EUR 765,000 EUR (2025, indexed)  _([T1])_
- **Children exemption** — EUR 25,000+ depending on age/disability  _([T1])_
- **Rates** — 10% / 20% (partner & children); 18% / 36% (others to second-degree); 30% / 40% (other)  _([T1])_

### 8.3 Japan

- **Basic exemption** — JPY 30,000,000 + (statutory heirs × 6,000,000)  _([T1] Inheritance Tax Act)_
- **Rates** — 10% to 55% (progressive, graduated by heir's share)  _([T1] Inheritance Tax Act)_
- **Worldwide asset taxation** — Worldwide assets if heir is Japan-resident for ≥ 10 of preceding 15 years  _([T1] Inheritance Tax Act)_

### 8.4 Denmark

- **Spouse exemption** — 100% (boafgift)  _([T1] Bo- og gaveafgift)_
- **Children rate** — 15% above DKK 333,100 (2025)  _([T1] Bo- og gaveafgift)_
- **Other rate** — 36.25%  _([T1] Bo- og gaveafgift)_
- **Gaveafgift on inter-vivos gifts** — 15% gaveafgift on inter-vivos gifts above DKK 76,800  _([T1] Bo- og gaveafgift)_

### 8.5 Switzerland

- **Cantonal/municipal tax; no federal IHT/gift tax** — Cantonal/municipal — federal level no IHT/gift tax. Most cantons exempt direct descendants and spouses. Rates for unrelated persons vary (Schaffhausen, Lucerne historically high; Schwyz, Obwalden, Nidwalden no IHT for direct line).  _([T1])_

## Section 9 — Other notable

**Other notable countries**

| Country | Status |
| --- | --- |
| **Sweden** | IHT and gift tax abolished 2004 |
| **Norway** | IHT abolished 2014 |
| **Austria** | IHT abolished 2008 |
| **Czech Republic, Slovakia, Hungary** | IHT abolished (Slovakia 2004, Hungary 2010, CZ for direct line) |
| **Australia** | No federal IHT/estate tax. Capital gains tax may apply on death depending on asset; small business CGT concessions |
| **Canada** | No estate/gift tax. **Deemed disposition** at FMV on death triggers capital gains tax on terminal T1 |
| **New Zealand** | No estate/gift tax |
| **Singapore** | No estate/gift tax |
| **Hong Kong** | No estate/gift tax |
| **UAE** | No estate/gift tax |
| **India** | No central IHT. Gift tax abolished 1998. Gifts > INR 50k generally treated as recipient's taxable income unless exempt category (relatives, marriage, will, inheritance) |
| **China** | Periodic IHT proposals; never enacted |
| **South Africa** | Estate Duty Act: 20% (up to ZAR 30m); 25% above. Donations Tax: same rates |
| **Brazil** | State-level ITCMD: 1-8% (varies by state) on death and inter-vivos gifts |
| **Mexico** | No federal IHT/gift. Gifts > 10% UMA × annual minimum days exempt to direct family |
| **Argentina** | Provincial IHT in Buenos Aires only (1.6-6.4%); other provinces have abolished |
| **South Korea** | High graduated rates: 10% to 50% on death; specific gift tax to 50% |

## Section 10 — Cross-border situs and double taxation

### 10.1 Situs rules (general)

- **General situs rules** — Most jurisdictions tax: Worldwide assets if the deceased was a tax/domicile resident; Local-situs assets only if non-resident/non-domiciled; Real estate ALWAYS at situs (regardless of deceased's residence) per most treaty practice  _([T1])_

### 10.2 Common situs definitions

**Common situs definitions**

| Asset class | Typical situs |
| --- | --- |
| Real estate | Country where land is located |
| Tangible movable | Country where located at date of death/gift |
| Shares in companies | Country of company's incorporation OR country of share register |
| Bank accounts | Country where bank is located |
| Government bonds | Country issuing the bonds |
| Private equity / unlisted shares | Country of company's residence |
| Cash | Country where cash is held |
| Crypto-assets | Highly debated; commonly attributed to deceased's residence |

### 10.3 Double taxation treaties

- **US bilateral treaties** — Bilateral estate/inheritance tax treaties exist between US with: Australia, Austria, Canada (limited), Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, Netherlands, Norway, South Africa, Sweden, Switzerland, UK  _([T1])_
- **UK bilateral treaties** — UK with: France, Ireland, Italy, India, Netherlands, Pakistan, South Africa, Sweden, Switzerland, US  _([T1])_
- **France bilateral treaties** — France with: Algeria, Austria, Bahrain, Belgium, Cameroon, Canada (Quebec only), Italy, Lebanon, Mauritius, Monaco, US, UK  _([T1])_
- **Germany bilateral treaties** — Germany with: Denmark, France, Greece, Sweden, Switzerland, US  _([T1])_
- **Unilateral relief** — Where no treaty, unilateral relief is usually available (foreign tax credit on the same asset class).  _([T1])_

### 10.4 EU Succession Regulation 650/2012

- **Scope of Regulation 650/2012** — Does NOT cover tax. Governs: Applicable law (residence at death by default; election possible to nationality law); Forum (residence at death); Recognition of grants; European Certificate of Succession. Tax remains national.

## Section 11 — Output specification

The reviewer brief must include:

1. **Decedent / donor profile** — residence, citizenship, domicile/LTR status, prior gift history
2. **Asset inventory** by situs with valuation methodology and supporting documentation
3. **Beneficiary inventory** with relationship classification per jurisdiction
4. **Exemption / allowance schedule** per applicable jurisdiction
5. **Relief schedule** — Agricultural Property Relief, Business Property Relief, Pacte Dutreil, German Verschonung, US marital deduction
6. **Tax computation** per jurisdiction
7. **Double taxation analysis** — credits available, treaty article references
8. **Filing deadlines and forms** per jurisdiction
9. **Step-up in basis analysis** for US-citizen beneficiaries (income tax consequence)
10. **Reviewer questions** — open items flagged as [T2] or [T3]

## Section 12 — Self-checks

- [ ] Domicile / LTR / residence tested per each jurisdiction's specific definition
- [ ] Asset situs determined per each jurisdiction's rules, not assumed by analogy
- [ ] Relationship classification per jurisdiction (Class I-IV in DE; Group I-IV in ES)
- [ ] Exemptions per jurisdiction applied to net not gross
- [ ] Business property reliefs verified for qualifying conditions (active business, holding period, payroll)
- [ ] Charitable and spousal deductions confirmed
- [ ] Treaty foreign tax credits applied where bilateral treaty exists
- [ ] Filing forms and deadlines per jurisdiction plotted
- [ ] US step-up basis recorded for beneficiary income tax planning
- [ ] Output flags every [T2]/[T3] item for reviewer judgement

## Section 13 — Prohibitions

- **Do not** assume a country exempts inheritance because there is "no estate tax" — many countries instead tax inherited gains via income tax (Canada deemed disposition; Australia CGT on death).
- **Do not** apply pre-FA-2025 UK domicile rules to FY 2025/26 cases — long-term residence applies from 6 April 2025.
- **Do not** treat Spanish ISD as eliminated nationally because Madrid exempts it — regional variation is the rule, not the exception.
- **Do not** claim US estate tax exemption of USD 13.99m for a non-resident alien — NRA exemption is only USD 60k (treaty-modifiable).
- **Do not** apply Pacte Dutreil or German Verschonung without confirming the holding-period and payroll commitments are sustainable post-transmission.

## Section 14 — Disclaimer

This skill and its outputs are provided for informational and computational purposes only and do not constitute tax, legal, or financial advice. Cross-border succession is highly fact-specific and irreversibly affects family wealth. Every output must be reviewed and signed off by credentialed estate planning practitioners in each affected jurisdiction before any return is filed.

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