Module III·Article III·~1 min read
Inheritance and Gift Tax: International Aspect
Taxes on Investment and Capital
Turn this article into a podcast
Pick voices, format, length — AI generates the audio
Inheritance Tax: International Overview
Russia: The inheritance tax was abolished in 2006. Exception: royalties paid to heirs of authors in science and literature — 13% Personal Income Tax (PIT). When receiving real estate as inheritance — there is no tax, but if sold before the minimum holding period — PIT applies.
USA: Federal inheritance tax — from 18% to 40% on amounts exceeding $13.6 million (2024). Estate Tax applies to worldwide assets of US citizens and residents.
United Kingdom: Inheritance Tax — 40% on amounts over £325,000 (for couples — up to £650,000). The worldwide assets of residents are taxed.
UAE: No inheritance tax. However, for non-residents, the Foreigners Law applies: with regard to assets in the UAE, Sharia law may apply (for Muslims) or the law of the country of citizenship. Practically, it is important for non-residents to draft a UAE will (DIFC Wills Service Centre).
Spain: Inheritance tax is regional, from 7.65% to 34%. Madrid gave a 99% discount to direct relatives. Catalonia — smaller discounts.
Gifts in Russia
Gifts between close relatives (children, parents, spouses, brothers, sisters) — are not subject to PIT. Gifts from a third party — 13% PIT on market value. Gifts of real estate from a non-resident — non-resident rate is 30%.
Practical Task
A Russian citizen with permanent residency in the UAE wants to transfer to his daughter: (1) an apartment in Moscow valued at 20 million rubles, (2) a share in an LLC (Russia) valued at 50 million rubles, (3) an investment account in the UAE ($10 million USD). For each asset: what are the tax consequences for gifting and for inheritance?
§ Act · what next