This is the question most property owners prefer not to address. It is also the one where the consequences of inaction are most significant, because by the time the issue becomes apparent, the options for remedying it are limited.

The situs rule

Real property is subject to the inheritance or estate tax of the country in which it is located at the date of death. This applies regardless of where the owner was resident or domiciled. It is one of the most consistent principles in international tax law and it applies in every major property market.

Country positions

France. Progressive inheritance tax from 5 to 45% for direct heirs, and up to 60% for unrelated beneficiaries. Each direct heir receives a €100,000 allowance per parent. For a property worth €800,000 passing to two children, the combined liability is material.

Spain. Rates vary considerably by autonomous community. Non-residents are taxed at national rates with a multiplier based on the pre-existing wealth of each heir. No inheritance tax treaty exists with Australia, the UAE, or most non-EU countries.

United States. Federal estate tax of 40% applies above the applicable exemption for US persons. Non-resident foreign nationals receive only a $60,000 exemption on US-sited assets. Both US real estate and US-listed securities are US-sited assets for this purpose.

Germany. Erbschaftsteuer applies at rates from 7 to 50% depending on the relationship between parties and the amount. Non-residents receive only a €2,000 exemption on German-sited property.

Italy. Direct heirs pay 4% on value above €1 million per heir. Italy is among the more succession-efficient European jurisdictions for family transfers.

Australia. No inheritance or estate tax applies. On death, a deemed capital gains disposal is triggered at market value, and the CGT on accrued gains falls on the estate.

UAE and Singapore. No estate or inheritance tax applies in either jurisdiction.

Note on UAE property: No inheritance tax applies. However, UAE succession law defaults to Sharia rules unless a registered Will is in place. Non-Muslim owners are strongly advised to register a DIFC or ADJD Will. In its absence, the distribution of UAE-sited assets on death may not reflect the owner's intentions.

What can be done

  • Review which countries your properties are in and what the local inheritance tax position is for your expected heirs
  • For France and Spain: assess holding structures that can reduce the taxable value transferred on death
  • For US property: consider whether a foreign company wrapper removes the estate tax exposure, noting the related compliance obligations
  • For all properties: ensure your will is valid and recognised in every country where you hold assets
  • Obtain a cross-border estate review during your lifetime, not when a succession is underway

Treaty protection

Some countries have bilateral inheritance tax treaties that prevent double exposure. Where no such treaty exists, the risk of dual liability is real and requires specific planning. The home country may also levy estate or inheritance tax on worldwide assets; the interaction between the two regimes depends on the countries involved.

Want to understand your family's exposure?

We map the inheritance tax position across every relevant jurisdiction and connect you with specialist advisers on appropriate steps.

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