In this article, we discuss how you can avoid estate taxes, also commonly referred to as the death tax. After all, if you’ve followed all of the tax laws properly during your life, why should some government get a final swipe at your estate?
They say the only things that are certain are death and taxes. As we frequently discuss, that isn’t necessarily true.
No one in Dubai or Vanuatu ever muttered those words, and there are plenty of tax-free countries in the world. In fact, in tax-free countries or not, it’s possible to live your life in a totally tax-free way using legal tax reduction strategies.
Offshore companies, offshore bank accounts, and a globally mobile lifestyle with proper travel and tax planning can allow you to keep more of your own money. That’s what we help people with every day.
Nomad Capitalist is a turnkey solution for offshore tax planning, dual citizenship, asset protection, and global diversification. Find out more here.
Before we discuss how to avoid estate taxes, let’s cover the basic terms.
Que sont les droits de succession ?
For many of us who are young entrepreneurs, the idea of passing down what we’ve built isn’t often top of mind. But it should be, because bankrupt governments are increasingly using estate taxes as a way to raise more revenue, particularly from people with substantial wealth.
Le gouvernement fédéral et certains États des États-Unis calculent les droits de succession en fonction de la valeur de vos biens à votre décès. Il y a donc deux types d’impôts sur l’héritage : les impôts fédéraux et ceux de l’État.
These taxes don’t affect every estate – in fact, a small number of people pay it, in part due to careful estate planning – but it does hit people who are most hurt: the wealthy.
In short, the death tax is – according to the IRS – “a tax on your right to transfer property at your death.”
Chaque pays du monde calcule cet impôt à sa façon, mais les règles de calcul sont en général assez simples.
In the United States, your estate tax obligation is determined by adding up the fair market value of all assets you own or control, including cash, real estate, equities, trusts, businesses, cryptocurrencies, insurance policies, precious metals, and any one-of-a-kind Wu-Tang Clan albums you bought. This is called your “gross estate.”
On peut déduire de ce montant toutes ses hypothèques et toutes ses dettes. Certains pays permettent de déduire également des frais administratifs. Vous ne devez toutefois pas oublier que les actifs tels que vos biens immobiliers ont pris beaucoup de valeur au fil des années, ce qui n’était pas forcément une bonne nouvelle pour vous.
Then, the government applies tax at current estate tax rates, which are generally not progressive but usually only apply to larger estates. If you have an old car and some Hermes bags to your name, you generally won’t have to pay.
Aux États-Unis, il est possible de transmettre tout ou partie de son patrimoine à son conjoint sans impôt et cela est pris en compte dans le calcul. Votre pays de citoyenneté joue un rôle important dans cette affaire. Par exemple, des règles de calcul spécifiques sont appliquées pour les anciens citoyens américains ou les citoyens américains ayant un conjoint non américain.
In 2023, the US estate tax threshold is $12.92 million per person, which will likely result in several thousand dead people paying a death tax.
That may not seem like a lot, and the small numbers are often bandied about by political commentators as evidence that the estate tax doesn’t really matter. Of course, it does matter if you’re the one paying for it, which is why you may want to consider internationalizing your estate.
Les taux d’imposition sur les successions dans le monde
The United States has the fourth highest estate tax in the developed world, with rates of 40%.
The world’s highest rate of 55% is levied by Japan, where it’s paid by everyone, including non-resident citizens and even expats who have resided in the country for ten years or more.
Other countries with the highest estate taxes are South Korea – 50% and France – 45%. The United Kingdom is tied with the United States with a top rate of 40%, while high-tax countries such as Spain, Belgium, and Germany apply rates in the thirties.
On the other hand, fifteen OECD member countries apply no death tax when the property is passed on to close family or lineal heirs, although some countries have exceptions.
Some European countries do have ongoing wealth taxes, so it’s possible that you would pay income tax and wealth tax when alive and then a death tax when you die.
Yet the average man on the street would insist that “the rich” aren’t taxed enough.
If you’ve read our site at all over the last ten years, you would know that our suggestion to those seeking low estate tax rates is to “go where you’re treated best” and find a zero-tax country with friendly laws for wealthy people.
The fact is, it’s possible to pay no estate tax at death by structuring your financial affairs properly while alive. You don’t even have to move to some far-flung country or set up a complicated structure.
No doubt, proper planning is important not only to ensure you are located in a tax-free country for an inheritance but also to ensure you properly exit your position in your current high-tax country. In most cases, you can’t simply go live in another country for a few days, die, and call it good.
On a positive note, more countries are reducing or eliminating their estate taxes as they realize that the entire concept is nothing but a way to unfairly bilk the wealthy out of money at death.
There is no way that any article on the internet could reliably cover all possible situations, nor should it. Proper estate planning is a highly subjective matter and should only be dealt with by professionals who know what they’re doing.
Si vous devenez un client Nomad Capitalist, nous vous aiderons à réduire vos impôts de façon légale.
Une planification judicieuse va bien au-delà de la lecture d’une simple liste. Nous vous présentons néanmoins ci-dessous, pour votre information, les pays sans impôt sur les successions.
Les pays sans impôt sur l’héritage
Australia has had no inheritance tax since 1979 when all of its states joined together to abolish the tax. That part is a rather straightforward and pleasant change of pace from Australia’s rather strict tax policies.
Les actifs reçus en héritage et provenant d’un état australien peuvent néanmoins être soumis à l’impôt sur les gains en capital. Les héritiers doivent conserver l’historique des investissements pour tous les actifs dont ils héritent ainsi que tous les coûts déduits du patrimoine.
Les résidents d’Australie qui héritent d’actifs étrangers risquent également de payer d’autres impôts australiens.
Malgré l’absence d’impôt sur l’héritage, l’Australie reste l’un des pays les plus taxés au monde.
Du point de vue du développement social, des infrastructures et de la sécurité, la Nouvelle-Zélande fait figure d’excellent élève. Mais le fait que ce pays soit isolé géographiquement et que les impôts y soient élevés est très dissuasif.
La Nouvelle-Zélande impose qu’une dernière déclaration d’impôt soit établie en votre nom à titre posthume. Sinon, il n’y a pas d’impôt sur l’héritage ni d’impôt sur les actifs légués.
Il faut un numéro d’identification fiscale pour produire sa propre déclaration. If you’re planning to move to New Zealand, you should have several million dollars to invest there. Recent changes in immigration law increased investment from NZ$5 million to NZ$15 million for anyone seeking to become a résidentes et à obtenir une naturalisation d’investir non plus 5, mais 15 millions de dollars néo-zélandais.
Unlike its neighbor to the south, Canada has no estate tax. In theory, that would make it an attractive domicile for wealthy Americans who want to enjoy the same language, culture, and geography without the hefty death tax bill when they expire.
Heirs of Canadian estates ne sont pas obligés d’indiquer leur héritage sur leur déclaration. Tout n’est pas aussi simple dans la réalité.
That’s because the CRA treats asset transfers after death as a sale, except in cases where such assets are passed to a surviving spouse, in which case there are exceptions.
There is a capital gains tax charged to the increase in the value of your worldwide assets at death, which must be reported on the deceased’s final tax return or “déclaration finale.” While a primary residence is generally exempt, other assets could trigger capital gains taxes at half the nominal rate.
Estonia is a model case study of a modern tax-friendly jurisdiction – personal income taxes are flat and going down, corporate taxes are flat and facturé uniquement lors de la répartitionet les droits de succession ont disparu depuis 2014. Ce pays possède son propre programme de résident numérique, which doesn’t apply to estate matters. Oh, and taxes can be easily filed online, too.
There are no death tax laws in Estonia. That said, any gains from the transfer of property received as a gift or inheritance – which are treated the same way in Estonia’s simplified tax code – are subject to income tax.
Gains from the sale of a primary residence are generally income tax-free, as are gains from the transfer of a summer cottage or garden house if it has been owned for more than two years.
Becoming a resident of Estonia is relatively straightforward for entrepreneurs, provided you’re willing to pay some tax, but citizenship requires you to learn Estonian.
As a civil law jurisdiction, Mexico’s estate tax law is rather complicated. Mexico technically does not recognize the concept of inheritance taxes, relying instead on a process of donations that determines how assets flow from parties to others who aren’t paying for the assets, including heirs.
Mexican law allows for assets to flow to spouses or children (“lineal descendants”) without tax and to other parties on a rather limited basis.
As in many civil law jurisdictions, Mexico’s stamp tax does apply to the transfer of property to descendants, although there is an exemption calculated based on the minimum wage.
Hong Kong abolished its inheritance tax in 2006 and even applied a “transition tax rate” of a flat US$13 to estates where someone died while the abolition was being put into place.
Today, Hong Kong has no wealth tax, no gift tax, and no estate tax. Even when it did, Hong Kong’s territorial tax status applied to estates as well, meaning foreign estates were exempt. It is still advised to rédiger un testament.
Here at Nomad Capitalist, we’re big fans of Hong Kong, even as their banks have become nearly impossible to deal with. It’s possible to become a resident of Hong Kong by forming a company and applying for a residence permit, although doing so voids any offshore tax benefits.
After seven years, you can obtain the permanent right of abode, although a limited number of tax treaties means you should ensure you do proper planning in your country of citizenship, too.
Macau is not only the “Las Vegas of Asia” and the highest-grossing gambling destination in the world, it also has considerable tax benefits for residents.
Those who live in Macau are not only exempt from income tax on foreign source income, but there is no gift tax, capital gains tax, or estate tax in Macau.
The territory, a Special Administrative Region of China, eliminated estate taxes back in 2006 to bring part of its tax policies more in line with Mainland China. It should be considered, however, that stamp duty may apply to transfers of some property, namely real estate.
It has become harder to become a resident of Singapore – let alone a citizen – since 2013 unless you have a couple of million dollars to invest there long-term. But those who live in Singapore benefit from a generous exemption from estate tax.
The Southeast Asian island city-state eliminated death taxes in 2008, making the tax process for inheritance rather simple. Somewhat like Hong Kong, there were always certain benefits for foreign assets.
Luxembourg offers a relatively favorable climate to avoid estate taxes, but it’s not exactly straightforward. European Union laws dictate that the deceased’s country of residence dictates his/her estate tax jurisdiction, although some assets can be taxed in your country of nationality.
Expats living in Luxembourg may choose to avail themselves of Luxembourg’s laws, although some countries, such as the United States, may also try to be involved.
If you are determined to have a Luxembourg estate, however, you can pay as little as 0%. Non-citizens generally pay a minimum rate of 2% calculated by a complicated formula. Surviving spouses receive inheritance subject to a 5% tax.
These rates apply for inheritances passed on to lineal heirs – rates to non-related parties are quite a bit higher. That said, Luxembourg has forced heirship rules that require surviving children to receive at least half of the deceased’s estate anyway.
While Norway is beautiful, it isn’t exactly known as a low-tax country. In addition to sky-high income taxes, the country also imposes an annual wealth tax. And Norwegians surprisingly don’t seem to mind.
The only upside to Norway’s high taxes is that the government actually saves and invests its budget surpluses rather than allowing itself to become mired in debt.
However, as of 2014, Norway has no estate tax. Living there to avoid estate taxes probably wouldn’t make sense, and dual citizenship is not allowed in Norway, but if you’re already Norwegian, you can take solace in this benefit.
Comme beaucoup de nations européennes où le revenu moyen est modéré, le Portugal a aboli l’impôt sur les successions en 2004. Cette opportunité, combinée à un climat très ensoleillé, a permis d’attirer des citoyens britanniques. Le Portugal offre en plus aux citoyens non européens un cadeau de dix ans d’exonération d’impôt sur le revenu, sur la plupart des sources de revenu.
Spouses and children are exempt from stamp duty on any inherited assets transferred to them upon the death of a family member, which puts Portugal one step ahead of other countries on this list.
For those who are not part of the deceased’s immediate family, there is a 10% stamp duty. Also of concern is capital gains tax if assets are sold right away. Either way, Portugal offers excellent tax benefits for foreign citizens and is one of our favorite countries we help people relocate to for tax purposes.
Serbia actually does have an estate tax, but many beneficiaries are exempt. Family members connected by one degree, such as parents, children, and spouses, may receive an inheritance exempt from tax.
Agricultural real estate may be inherited tax-free with up to two degrees of separation, meaning grandchildren can inherit farm property. Any other inheritances may be taxed at rates as low as 2.5%.
While Serbia does not offer the “international lifestyle” that estate tax-free cities like Sydney, Montreal, or Singapore offer, it does offer a low cost of living and relatively low personal and corporate taxes to benefit from during your life. It’s also relatively facile d’y émigrer. Le gouvernement portugais a récemment annoncé la mise en place de nouveaux programmes pour la résidence.
Il est notoire que la Slovaquie, située au cœur de l’Europe du Centre-Est, n’est pas un pays faiblement taxé. Toutefois, le régime fiscal slovaque ne comporte pas d’impôt sur les dividendes, ni sur la fortune, ni sur les donations, ni sur l’héritage. Contrairement à d’autres pays, il n’y a pas non plus de restrictions pour les descendants directs.
Slovakia does charge capital taxes on any appreciation in estate assets’ value when sold. As with many countries in the region, income tax rates are moderate – both personal and corporate income tax rates are fixed at 19%.
When the United States Congress voted to repeal its own estate tax by the 2020s, Quartz suggested that the US was actually like Sweden in an unlikely way: Sweden had unanimously voted to repeal its own death tax years earlier.
Like the United States today, Sweden’s estate tax rates were as high as 60% before settling at a flat 30% when the tax was abolished. Now, Swedes pay nothing in estate tax at death.
Sweden does, however, have forced heirship laws which mean that anyone without estate planning will be forced to bequeath their money to their spouse and children.
There have always been a number of loopholes in both the previous tax system and the forced heirship system, and this is why wealthy Swedish business owners often establish foundations elsewhere in Europe.
Israel technically doesn’t have an estate tax, but it is worth noting that since so many Israeli citizens are actually tax residents and domiciled in other jurisdictions, good international tax planning is often needed to avoid estate taxes in other jurisdictions. Israel does, however, impose heavy capital gains taxes on assets sold.
Vous seriez prêt à aller jusqu’au bout du monde pour échapper aux impôts sur l’héritage ? Alors Vanuatu, which doesn’t tax almost anything from income to corporate profits to inheritances. Vanuatu is a tax haven in the ultimate sense of the word, and while procedures have become a bit more strict, anyone can devenir un résident du Vanuatu ou un citoyen économique.
Provided you’ve cleared up any estate matters and connections in your home country, being tied to Vanuatu would mean you could legally pay zero tax.
Where to Move to Avoid Estate Taxes?
Again, this article is not designed to solve any one specific situation, nor should it. If you have accumulated millions of dollars, then you know the importance of strategy.
And part of that is having a good team of advisors around you. So if you do have questions, you can always nous contacter si vous avez des questions sur la diversification de vos actifs et la planification successorale.
Sachez toutefois que votre planification successorale, très personnelle, peut vous contraindre à changer de mode de vie.
As we mentioned earlier, you can’t simply pack your bags for a vacation and claim an exemption from your home country’s estate tax laws. La planification fiscale et le choix du pays de résidence sont des sujets complexes.
If you’re willing to relocate to a tax haven or zero-tax country, your life will be easier. Countries like Vanuatu will be happy to basically leave you alone, allowing you to deal with just about zero taxation.
If you’re willing to totally divorce yourself from your home country by renouncing your citizenship, that can make things easier, too, although it’s generally only a big issue for US citizens, and even then, there may be proper planning strategies.
En fin de compte, seul un consultant professionnel sur la fiscalité internationale possédant les connaissances suffisantes sur les stratégies offshores légales peut vous aider à trouver la solution qui vous convient. Pour y parvenir, il faudra d’abord que vous sachiez répondre à des questions personnelles sur ce que vous possédez et sur le mode de vie que vous envisagez.
Vous voulez une vie faite de libertés financières et personnelles ? Adoptez un plan d’action complet élaboré par Nomad Capitalist afin de réduire légalement vos impôts tout en préservant votre patrimoine pour votre descendance.