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Inheritance tax in Luxembourg 2026
Luxembourg inheritance tax is gentle at the centre and sharp at the edges: spouses and partners pay 0%, children pay 0% on their lawful share (2.5%–5% only on anything extra), while unrelated heirs start at 15%.
A wealth-based surcharge adds a surcharge of up to 220% of the base duty as an heir's share climbs past €1.75 million — taking the worst case to 48%.
Foreign real estate is excluded, and Luxembourg has no inheritance tax treaties at all.
At a glance
- top rate
- 48% (15% base plus a 220% surcharge, unrelated heirs above €1.75M)
- entry band
- 0% — spouses, partners, and children's lawful shares; estates under €1,250
- tax year basis
- Charged at death
- filing deadline
- Estate declaration within 6 months (Luxembourg deaths)
- residency basis
- Worldwide estate (except foreign property) of Luxembourg-domiciled deceased
- regime flag
- Gifts must generally be notarised and taxed at registration
Rates
Base inheritance rates by relationship (2026)
| Heir | Lawful share | Beyond the lawful share |
|---|---|---|
| Spouse / registered partner | 0% | 0% |
| Children (direct line) | 0% | 2.5% – 5% |
| Siblings | 6% | 15% |
| Nephews, nieces, uncles, aunts | 9% | 15% |
| Unrelated heirs | 15% | 15% |
Wealth surcharge on each heir's share
| Share value (EUR) | Rate increase | Note |
|---|---|---|
| Under 10,000 | None | |
| 10,000 – 100,000 | +10% to +60% of the rate | Rising in steps |
| 100,000 – 1,000,000 | +70% to +170% | |
| Over 1,750,000 | +220% | 15% base becomes 48% at the extreme |
Thresholds & allowances
- Small estatesUnder €1,250: fully exempt
Spouse without common children: €38,000 exemption
- Gift tax (registration duty)1.8%–2.4% direct line; 4.8% spouses; 6% siblings; up to 14.4% unrelated
Gifts in the year before death fall back into the estate unless already taxed
Residency
Residency trigger
Inheritance tax applies when the deceased was domiciled (or held their economic centre) in Luxembourg, on worldwide assets minus foreign real estate; each heir is taxed on their net share.
Non-resident treatment
For non-resident deceased, only Luxembourg real estate is reached (via transfer duty rules). No inheritance tax treaties exist; foreign immovable property taxed abroad is unilaterally exempt.
Notes
- The 'lawful share' is the portion heirs are entitled to by law — children inheriting exactly what the civil code reserves for them pay nothing at all.
- Gifts of Luxembourg real estate carry an extra 1% transfer tax, and City of Luxembourg transfers add a 50% municipal surcharge on registration fees (single-family homes excepted).
- Because gift duty in the direct line is only 1.8%–2.4%, notarised lifetime giving is the standard planning route for larger estates.
- Annuities paid by children to a surviving parent are exempt.
FAQ
Do spouses and children pay inheritance tax in Luxembourg?
Spouses and registered partners: 0%. Children: 0% on their lawful share, and only 2.5%–5% (plus the wealth surcharge) on anything above it.
What is the maximum inheritance tax in Luxembourg?
48% — the 15% unrelated-heir rate multiplied by the 220% surcharge that applies to share values above €1.75 million.
Figures: tax year 2026, compiled from public sources. Not tax advice.