Gift and inheritance tax in the Netherlands

Gift and inheritance tax in the Netherlands

Gift tax in the Netherlands is applicable on a gift made by any Dutch resident to another person. It does not matter whether the person who receives the gift lives in or outside the Netherlands.

Inheritance tax applies when a Dutch resident passes away. Dutch inheritance tax also applies when the beneficiaries live outside the Netherlands.

The Dutch gift and inheritance taxes can also apply if a person was formerly resident of the Netherlands. Other situations where Dutch gift or inheritance taxes could apply include:

• A Dutch citizen makes a gift or passes away within 10 years after moving out of the Netherlands
• A person with any other citizenship makes a gift within one year after leaving the Netherlands

Gift and inheritance tax rates

The general gift and inheritance tax rates are the same. The rates are:

• Children and partners: 10 percent up to 128.750 euros and 20 percent on the surplus
• Grandchildren: 18 percent up to 128.750 euros and 36 percent on the surplus
• Any other person: 30 percent up to 128.751 euros and 40 percent on the surplus

Gift and inheritance tax exemptions

There are several gift and inheritance tax exemptions that can apply. Below we outline the exemptions for the gift tax, as well as for the inheritance tax.

General gift tax exemptions

The general gift tax exemption to any person is 3.244 euros (2021). The general gift tax exemption can be used every year.

The general gift tax exemption between parents and children is 6.604 euros (2021). The exemption is applicable every year. Therefore, a parent can make a gift on an annual basis.

Additional exemptions between parents and children

In addition to the general gift tax exemption, parents can make an extra tax-free gift to children that are aged between 18 and 40.

The following additional exemptions can be claimed only once in a lifetime:

• A parent can grant an amount of 26.881 euros under the higher gift tax exemption once in a lifetime.
• The exemption of 26.881 euros can be increased up to 55.996 euros under the condition that the gift will be used for an expensive study.

Gift tax exemption for the purchase of a primary residency

Any person can grant a relative or non-relative between the ages of 18 and 40 an amount of 105.302 euros free of gift tax, under the condition that the gift will be used for:

• The purchase of a home that will become a primary residence
• Repayment of a loan on a home which is a primary residence
• The renovation of a home that is considered a primary residence

Inheritance tax exemptions

The inheritance tax exemptions in the Netherlands are as follows:

• 21.282 euros on inheritances from parents to children / grandchildren
• 2.208 euros on inheritances from any other person
• 671.910 euros between tax partners
• 50.397 euros on inheritance from children to their parents
• 63.836 euros from parents to their child who has a disability

Gift and inheritance tax on businesses

In the case of a gift or inheritance of a business, there are special rules and tax exemptions. Some of the conditions for exemption are:

• It concerns an active business and not a passive business
• The previous owner should have the company for at least five years in case of a gift and at least one year in case he passes away
• The person who has taken over the business should remain owner of the business for at least five years.

On top of the gift or inheritance tax exemption, the potential income tax can be passed through to the new owner.