Which law applies?
International succession is governed in Europe by the EU Succession Regulation. The default rule: the law of the country where the deceased had their habitual residence at death applies.
A Dutch national living in Spain therefore falls by default under Spanish succession law. But the deceased can have chosen the law of their nationality (Dutch law) by will.
Where do you pay inheritance tax?
For Dutch inheritance tax the deceased's residence is decisive:
- The deceased lived in the Netherlands: Dutch inheritance tax on worldwide assets;
- The deceased lived abroad but held Dutch nationality and lived in NL within the past 10 years: Dutch inheritance tax still applies (the "10-year rule");
- The deceased had been abroad longer than 10 years and no longer Dutch national: no Dutch inheritance tax, only the foreign tax.
Double taxation
If both Dutch and foreign inheritance tax are owed on the same assets, the Netherlands has only a few bilateral treaties to prevent double inheritance tax (Belgium, Israel, Austria, the United Kingdom, the United States, Switzerland, Suriname, Finland and a few others). Outside those treaties the Netherlands gives a unilateral relief for foreign tax paid.
Practical consequences
- For real estate abroad, local succession law and local inheritance tax often apply;
- For bank accounts abroad, local procedures usually apply that do not always accept a Dutch certificate of inheritance; often a European certificate of succession is needed;
- For pensions and annuities double taxation can exist between the country of payout and the heir's country.
When a notary (or estate-law lawyer) is required
Almost every estate with foreign elements needs a notary or estate lawyer. Reasons:
- determining the applicable law;
- arranging a European certificate of succession;
- applying treaties;
- liaising with foreign institutions.
Our Nalenta triage refuses estates where the deceased lived abroad or where significant foreign assets exist. For such cases a specialist is safer.