§ Lord Marlesford
asked Her Majesty's Government:
Whether they will give the top rate of inheritance tax for each country in the European Union, indicating in respect of each value (expressed in pounds sterling) of the deceased's estate at which rate of tax starts to apply. [HL3721]
§ Lord McIntosh of Haringey
Only four EU countries use the total value of the deceased's estate in calculating inheritance tax or similar due.
In the case of Denmark, a tax-free allowance of £14,906 is given. Estate duty is imposed on any excess value of the estate at a rate of 15 per cent. Transfers to a surviving spouse are exempt. An additional inheritance tax assessable on the recipient is payable on property passing to certain persons other than close relatives, based on their share of the estate.
In the case of Ireland, a 2 per cent. probate tax is levied on all estates with a taxable value in excess of £10,504. There are various exemptions and there is a 30 per cent. value reduction for agricultural land and buildings. In addition, capital acquisitions tax is levied on inheritors of property based on each individual's share of the estate.
In the case of Italy, estate tax is charged where the net value of the estate is in excess of £101,695. The top rate of 27 per cent. is charged where the estate is valued in excess of £1,220,341. An additional inheritance tax assessable on the recipient is payable on property passing to certain persons, other than close relatives, based on their share of the estate.
In the case of the UK, inheritance tax is charged at nil per cent. on the first £223,000 of the total value chargeable in connection with the death, and 40 per cent. on any balance over that amount.
In addition to taxing the estate, three of these countries, Denmark, Ireland and Italy, tax certain beneficiaries on their share of the estate.
The remaining 11 EU countries also charge inheritance tax in this way. In most cases the rate charged depends on the relationship between the recipient and the deceased and on the value of the share 118WA received. The tax-free element or exemption is usually higher the closer the relationship to the deceased.
The table below sets out the top rates and maximum thresholds that apply; these are invariably those where the recipient is classed as "other" and is not related to the deceased.
Country Top rate % Share valued in excess of £ Austria 60 2,880,533 Belgium 80 123,938 Denmark 36.25 no minimum Finland 48 2,220 France 60 995 Germany 50 16,184,466 Greece 60 173,961 Luxembourg 48 1,145,475 Netherlands 68 513,171 Portugal 50 360,887 Spain 34 *667,711 Sweden 30 12,879 *Spain, a net wealth related surcharge, by reference to the recipient's net wealth is also due.