Why some things can’t wait: Timely estate planning to reduce taxes

Contemplating death is probably not something you do in your everyday life. Indeed, you may not want to think about death even for a brief moment. However, protecting your loved ones against unnecessary tax burdens should be something to always keep in mind, as they may arise after your death.

Inheritance tax in the Netherlands

In the Netherlands, inheritance tax is payable over the value of the estate if the deceased was (deemed to be) a Dutch resident upon death. The estate also encapsulates property located abroad. Such assets may be subject to double, or even triple, taxation due to non-Dutch tax law also applying. There are several countries that have established agreements with the Netherlands to avoid this. 

In the Netherlands, the applicable tax rate depends on your relationship to the deceased and the exact value of the assets you acquired as a beneficiary. It varies between 10 and 40%. One must also keep in mind, though, that there are tax exemptions that apply to Dutch inheritance tax, the amount of which is also dependent on your relationship with the deceased. 

In 2026, partners of Dutch residents are entitled to a tax-free allowance of €828.035, whereas children are entitled to an exemption of €26.230. 

When comparing Dutch inheritance tax regulations with those of other countries, the conclusion is usually that inheritance tax in the Netherlands is quite high.

So, what can you do to keep inheritance tax at a minimum? 

How can you save money on inheritance tax?

Below, a few options to save money on inheritance tax are listed, with which a Dutch notary can help you:

Donate your assets to your children

In case your children inherit from you, they will have to pay 10% to 20% inheritance tax. By donating assets to your children while you and they are still alive, you can (partly) save on inheritance tax. As with inheritance tax, there are exemptions that apply to gift tax, which you can invoke when donating assets to your children on a tax-free basis.

Check your (pre- or post-) nuptial agreement 

If you are married under a nuptial agreement, it is sensible to have it reviewed by a notary. Nuptial agreements do not designate your heirs, but they do affect the total size of your estate and, thus, the inheritance tax to be paid upon death. Adjusting your nuptial agreement can sometimes help save on inheritance tax at death.

For example, by stipulating in your nuptial agreement that at the end of your marriage, in the event of your death, there will be a settlement such that each partner is entitled to half the value of the total assets present. Including such a clause may be attractive if the assets mainly belong to one of the partners. If the marriage ends due to the death of the ”richer” partner, this settlement reduces that partner's assets and their estate. As a result, less inheritance tax is paid.

Reduce your inheritance tax now

Draw up your last will

In a will, you can include provisions that lead to savings on inheritance tax. You can postpone the payment of inheritance tax until your partner dies as well. You may also choose to save on inheritance tax at the time of your partner's death by paying tax when you die.

The answer to the question which type of will is right for you depends on your personal situation, the size of your assets and your personal wishes. Furthermore, if you have grandchildren, it may be worth including them in your will. This is because grandchildren can also receive part of your inheritance tax-free. 

Estate planning: Not just for the very wealthy

It is wise to leave matters relating to your estate planning in safe hands. This does not merely apply to the very wealthy. For instance, the mere possession of a house or assets located abroad would necessitate proper estate planning. By taking the right steps in advance, you can minimise tax burdens, avoid unnecessary complications, and ensure that your assets are distributed according to your wishes.