Exemption
In 2026 a grandchild has an exemption of 25,000 EUR, equal to a child. Above the exemption a grandchild pays 18 % in bracket 1 and 36 % in bracket 2, against 10 / 20 % for a child.
Why higher rates?
Lawmakers want to discourage parents from "skipping" their inheritance to grandchildren purely for tax reasons. Higher grandchild rates reduce that incentive.
Worked example
A grandmother leaves 100,000 EUR to a grandchild.
- Exemption: 25,000 EUR
- Taxable: 75,000 EUR
- Tax 18 % on 75,000 EUR = 13,500 EUR
Compare: the same amount to a child would be 7,500 EUR (10 %).
Representation
If a child of the deceased has already passed away, that child's children (the grandchildren) inherit in their place. This is representation. In that case the grandchild is taxed at the child's rate (10 / 20 %), not the grandchild rate.
Representation is therefore tax-favourable compared to a direct legacy to a living grandchild.
Gifting to grandchildren
The same logic applies to gifts. A grandparent may gift around 2,700 EUR tax-free per year to a grandchild. Above that, the same 18 and 36 percent rates apply.
A combination of yearly gifts plus a small inheritance can be tax-efficient for a grandparent with several grandchildren.
Tip
Want to leave something to grandchildren without the high rate? Ask a notary about paper gifting, legacy with set-off or combining representation with a will. With careful planning a grandparent can transfer wealth efficiently to grandchildren.