Inheritance and Estate Tax by Country: 2026 Guide

Inheritance and estate tax splits the world into two camps. Most of continental Europe taxes the heir who receives the money — with large family allowances and brutal rates for distant relatives or strangers — while the US and UK tax the estate before anyone inherits. The number that decides your bill often isn't where the assets sit; it's where you were domiciled or resident when you died. In 2026 the US shields $15 million per person (IRS) while a UK estate pays 40% above just £325,000 (GOV.UK).

TL;DR: In 2026 the US estate tax exemption is $15,000,000 per person (IRS), the UK charges 40% above £325,000 (GOV.UK), and Japan tops the table at 55% (PwC). Continental Europe taxes the heir, not the estate. A handful of jurisdictions — including the UAE, Singapore and Hong Kong — charge nothing at all.

Estate tax vs inheritance tax: what's the actual difference?

The split is structural, and it changes who pays. An estate tax (US, UK) is charged on the total value of what the deceased left, before distribution. An inheritance tax (most of Europe) is charged on each beneficiary's share, scaled to how closely related they were. Only 24 OECD countries levy any death tax at all, raising about 0.5% of total tax revenue on average (Tax Foundation).

Why does this matter to you? Because the same family wealth produces wildly different outcomes depending on the model. Under an estate tax, the rate is flat and blind to relationships — the estate pays one bill, then heirs split what's left. Under an inheritance tax, a child usually enjoys a huge tax-free allowance, while an unrelated friend or a niece may be hammered at 40% to 60% on the same euro.

The third variable is the one that trips up expats: connecting factor. The US taxes the worldwide estates of its citizens and domiciliaries. The UK taxes worldwide assets for those treated as UK-domiciled. European inheritance taxes typically hook either the deceased's residence or the heir's residence — sometimes both. So two people holding identical portfolios can face opposite bills based purely on paperwork.

Citation capsule: Inheritance, estate, and gift taxes are levied in 24 OECD countries but raise only about 0.5% of total tax revenues on average among countries that levy them, down from a 1965 peak near 1.27%, according to the Tax Foundation. The US and UK tax the estate; most of continental Europe taxes the heir.

[INTERNAL-LINK: how tax residency is determined → guide to day-count and domicile rules]

How much is inheritance and estate tax by country in 2026?

Headline rates range from zero to 55%, but the rate alone is misleading without the threshold. The US exempts the first $15 million per person in 2026 (IRS); the UK exempts only £325,000 then charges 40% (GOV.UK). Japan's 55% top rate looks fearsome, but it only bites the slice above JPY 600 million (PwC).

Here's the 2026 comparison for the major jurisdictions, with the exemption or close-relative allowance that actually drives the bill.

[CHART: Bar chart — top inheritance/estate tax rate by country, 2026 (Japan 55% down to zero-tax jurisdictions) — PwC, IRS, GOV.UK]

[UNIQUE INSIGHT] The top rate tells you almost nothing on its own. Japan's 55% and the US 40% sit at opposite ends of the real-world burden because of the threshold gap — a $14 million US estate pays nothing federally, while a comparable Japanese estate is deep into the higher brackets. Always read the rate and the exemption together, or you'll rank countries backwards.

Why does continental Europe tax the heir instead of the estate?

Europe's heir-based model rewards close family and punishes distance. France illustrates it cleanly: children get a €100,000 tax-free allowance per parent, then pay 5% rising to 45% on amounts above roughly €1,805,677 — but an unrelated beneficiary can be taxed at 60% with almost no allowance (French-Property). The relationship, not the asset, sets the rate.

This is the structural trap for expats and blended families. A long-term partner who never married, a stepchild who was never formally adopted, or a favourite niece is treated as a near-stranger in much of Europe. The headline "children's rate" doesn't apply to them, and the allowances collapse to a few thousand euros.

France: generous to children, punishing to everyone else

France runs a progressive scale for direct-line heirs after the €100,000 per-child allowance: 5% on the first slice, climbing through 20% on mid-sized inheritances to 45% above about €1.8 million (French-Property). Siblings face a separate, steeper scale, and unrelated beneficiaries hit a flat 60%.

The lesson repeats across the continent: structure who inherits, not just how much. France's allowances also reset every 15 years for lifetime gifts, so spreading transfers over time is a core planning move there. Anyone weighing a move should read our France jurisdiction profile alongside the succession rules, because forced-heirship law can override your will entirely.

Ireland: one flat rate, three threshold groups

Ireland keeps it simpler. Capital Acquisitions Tax (CAT) is a flat 33% on gifts and inheritances above tax-free thresholds set by relationship: €400,000 for a child (Group A), €40,000 for a sibling or niece/nephew (Group B), and €20,000 for everyone else (Group C), in effect from late 2024 (Revenue.ie). The thresholds aggregate across a lifetime, so earlier gifts eat into them.

A child inheriting €500,000 from a parent pays 33% on €100,000 — €33,000 — while a friend inheriting the same €500,000 pays 33% on €480,000. Same money, an order-of-magnitude difference in tax. See our Ireland jurisdiction profile for how CAT interacts with the wider regime.

Citation capsule: Ireland levies Capital Acquisitions Tax at a flat 33% on gifts and inheritances above thresholds of €400,000 (parent to child, Group A), €40,000 (Group B) and €20,000 (Group C), per Revenue.ie. France taxes direct-line heirs from 5% to 45% after a €100,000 per-child allowance, with unrelated beneficiaries taxed up to 60%, per French-Property.com.

How do the US and UK estate taxes work in 2026?

Both tax the estate, but the thresholds couldn't be further apart. The US exempts $15,000,000 per person for 2026 — up from $13,990,000 in 2025 after the One Big Beautiful Bill — then charges up to 40% above it (IRS). The UK exempts only £325,000 and charges a flat 40% above that (GOV.UK).

That $15 million figure is the headline of the year. The 2025 law made the higher exemption permanent rather than letting it sunset, so a married US couple can shelter $30 million combined before federal estate tax applies. The 2026 annual gift-tax exclusion stays at $19,000 per recipient, and gifts to a non-citizen spouse are sheltered up to $194,000 (IRS).

The UK's frozen bands and the 40% cliff

The UK is moving the opposite way. The £325,000 nil-rate band and the £175,000 residence nil-rate band — which can lift the threshold to £500,000 when a home passes to children or grandchildren — are frozen until 5 April 2030 (GOV.UK). With asset prices rising and thresholds static, fiscal drag pulls more middle-class estates into the 40% charge each year.

[PERSONAL EXPERIENCE] In planning conversations, the UK number people underestimate most is the residence nil-rate band taper — it shrinks for estates above £2 million and disappears entirely around £2.35 million. Plenty of homeowners assume they'll get the full £500,000 shelter and discover their estate is large enough to lose it. The £325,000 base is the only figure you can rely on.

For Americans and Britons weighing relocation, the contrast with no-tax hubs is stark. Estate-tax-free jurisdictions such as Dubai, Singapore and Hong Kong charge nothing on death, which is why they feature heavily in succession planning for mobile wealth.

Citation capsule: The US federal estate tax exemption is $15,000,000 per person for 2026, up from $13,990,000 in 2025 following the One Big Beautiful Bill, with the annual gift exclusion at $19,000, per the IRS. The UK charges 40% above a £325,000 nil-rate band, frozen until April 2030, per GOV.UK.

Which countries have no inheritance or estate tax in 2026?

Several major economies levy no death tax at all — and they dominate relocation planning. The UAE, Singapore and Hong Kong charge zero inheritance or estate tax in 2026. They sit alongside the broader fact that most OECD members raise very little from death duties, just 0.5% of total revenue on average where they exist (Tax Foundation).

Zero-tax status isn't always permanent or unconditional, though. Some jurisdictions abolished death taxes outright; others simply never introduced them. And being resident in a no-tax country doesn't automatically free you — if you remain US-domiciled or UK-domiciled, your home country can still tax your worldwide estate regardless of where you live.

[UNIQUE INSIGHT] "No inheritance tax" countries often hide a property transfer charge that does similar work. Portugal exempts spouses, children and parents but applies a 10% stamp duty to everyone else; Malta and Cyprus levy duty on the transfer of real estate. The death tax is gone, but the state still takes its cut when property changes hands — read the property-transfer rules before assuming zero means zero.

Relocation candidates frequently shortlist Portugal, Malta and Cyprus precisely because close-family inheritance escapes tax, while keeping EU residency on the table. Each still needs checking against your own domicile, since that's the factor your origin country uses to chase your estate.

Frequently asked questions

Does moving abroad escape US estate tax?

Not by itself. The US taxes the worldwide estates of its citizens and domiciliaries regardless of where they live, so a US citizen in Dubai still falls under the $15,000,000 exemption and 40% rate for 2026 (IRS). Only formally expatriating — renouncing citizenship — changes the connecting factor, and that carries its own exit-tax cost.

Which country has the highest inheritance tax?

Japan has the world's highest top inheritance tax rate at 55%, applied to the taxable portion above JPY 600 million under a progressive scale starting at 10% (PwC). South Korea is second among major economies, with rates from 10% to a top marginal 50% on a tax base above KRW 3 billion (PwC).

Is Spain's inheritance tax really 34%?

Only on paper. Spain's national progressive rates run from 7.65% to 34%, but autonomous communities such as Madrid and Andalusia grant close relatives (Groups I and II) reductions of up to 99% on the tax payable (Blevins Franks). Where you die inside Spain can change a family inheritance bill from substantial to almost nothing — see our Spain jurisdiction profile.

Do zero-tax countries tax inheritance at all?

Some charge a property transfer duty instead. The UAE, Singapore and Hong Kong levy no death tax, but Portugal applies a 10% stamp duty to non-close relatives, and Malta and Cyprus charge duty on real estate transfers. Across the OECD, death taxes raise only about 0.5% of total revenue where they exist (Tax Foundation).

The takeaway for 2026

The country that taxes you on death may not be the country your money lives in. The US and UK tax the estate — generously at $15 million in the US (IRS), aggressively at £325,000 in the UK (GOV.UK). Continental Europe taxes the heir, with Japan's 55% and France's up-to-60% rates punishing distant beneficiaries far harder than children. Zero-tax hubs exist, but domicile can drag your estate back home regardless.

Before you plan around any single rate, pin down three things: which model applies, who inherits and at what allowance, and which country's connecting factor binds you. Map the exemption alongside the rate, check the property-transfer duty in "no-tax" countries, and confirm your domicile status. A 99% Spanish regional relief or a $15 million US shield only helps if the right country's rules actually reach you.

Disclaimer: This article is general information, not tax or legal advice. Tax rules change and depend on your specific circumstances. Consult a qualified professional before acting.

Sources

• IRS releases tax inflation adjustments for tax year 2026, including amendments from the One, Big, Beautiful Bill | IRS
• Inheritance Tax | GOV.UK
• Inheritance Tax nil-rate band and residence nil-rate bands from 6 April 2028 | GOV.UK
• CAT rates | Revenue.ie
• CAT group thresholds | Revenue.ie
• Japan - Individual - Other taxes | PwC Worldwide Tax Summaries
• Korea, Republic of - Individual - Other taxes | PwC Worldwide Tax Summaries
• Inheritance, Estate, and Gift Taxes in OECD Countries | Tax Foundation
• Calculation of Liability to French Inheritance Tax | French-Property.com
• How Spain's succession tax reforms are protecting family inheritance | Blevins Franks