How inheritance tax works across borders: 3 connecting factors
Most digital nomad taxes come every year: income tax, social contributions and VAT on invoices to foreign clients. Inheritance and gift taxes come once, on a death or a gift, and every country decides for itself whether that transfer is its business.
Countries use 3 connecting factors, and many use more than 1 at once:
- Situs, meaning where the asset is. Land and buildings answer to the country they are in, and some countries also claim local shares, bank accounts and business assets.
- The person who dies or gives. Their residence, domicile or citizenship reaches worldwide assets, and some countries keep it for years after that person leaves.
- The heir. Countries that tax the recipient can tax an inheritance from abroad only because the heir lives there.
The taxes come in 2 shapes. An estate tax charges the estate before it is shared out, and in the UK the executor or administrator usually pays it (GOV.UK). An inheritance tax charges each heir on what they receive, and in Ireland the beneficiary generally bears it (PwC Ireland).
Which connecting factors 8 countries use, checked October 12, 2026. Sources listed under Sources.
| Country | Worldwide assets taxed when | Assets taxed even if nobody involved lives there |
|---|---|---|
| United Kingdom | The person who dies or gives is a long-term UK resident (10 of the previous 20 tax years in the UK), a status that lasts 3 to 10 tax years after leaving | UK assets, such as UK property and bank accounts |
| United States | The person who dies or gives is a US citizen, or a non-citizen domiciled in the US | US real estate and tangible property in the US, plus US shares at death but not as gifts (26 U.S.C. 2501(a)(2)) |
| Germany | The person who dies or gives, or the heir, lives in Germany, or is a German national abroad for 5 years or less | German real estate, assets of a business run in Germany and stakes of 10% or more in German companies (BewG, section 121) |
| France | The person who dies or gives was French resident, or the heir was for 6 of the last 10 years | Property in France |
| Spain | The heir is a Spanish tax resident | Assets located in Spain |
| Ireland | The person who dies or gives, or the heir, is resident or ordinarily resident in Ireland; an exception may apply to someone domiciled abroad | Assets in Ireland |
| Netherlands | The person who dies or gives lived there, or is a Dutch national who left less than 10 years earlier | Nothing: estates of non-residents are outside the tax |
| Monaco | Never | Property situated in Monaco |
Assets taxed where they sit: property, shares and bank accounts
Situs is the claim no move can end: the country where land, buildings and often shares or accounts sit can tax them whoever owned them, so an apartment kept in the old home country stays inside its inheritance tax.
The UK taxes only the UK assets, such as property or bank accounts in the UK, of someone based abroad, which for deaths after April 5, 2025 means someone who was UK resident for fewer than 10 of the last 20 tax years (GOV.UK) or a former long-term resident who has been away longer than the 3 to 10 tax years that status lasts (HMRC, IHTM47020); foreign currency accounts, overseas pensions and some UK investment funds are left out (GOV.UK).
The US taxes a non-citizen whose domicile at death was abroad only on US-situated assets, such as US real estate, tangible property in the US and US marketable securities, while bank deposits not tied to a US business count as outside the US (IRS). The executor files Form 706-NA once those US assets plus adjusted taxable gifts pass $60,000 (IRS).
France taxes all personal and real property located in France whatever the residence of the person who died (PwC France), and Spain taxes non-residents on what they inherit from assets located in Spain (PwC Spain).
Monaco's tax system runs on situs alone: it taxes property situated in Monaco whatever the domicile, residence or nationality of the person who died, at 0% for a spouse, children and parents and up to 16% for unrelated heirs (Monaco government).
A US apartment keeps a US estate open
Moving to Dubai ends no claim the US has on a $600,000 apartment in Miami. A non-US citizen who dies domiciled in the UAE still has a US estate: the executor files Form 706-NA because the US assets pass $60,000 (IRS). With no mortgage and no estate tax treaty, the rate schedule puts the tax at $192,800 before a $13,000 credit, so the estate owes $179,800, about 30% of the apartment (26 U.S.C. 2001(c), 26 U.S.C. 2102).
Residence, domicile and citizenship: how long the country you leave can tax you
The UK tied its worldwide reach to domicile until April 2025 and the US still does for non-citizens, so the gap between domicile and residence decides more for estates than for income tax.
Since April 6, 2025, you are a long-term UK resident if you were UK resident for at least 10 of the 20 tax years before the year of the death or gift, whatever your domicile (HMRC, IHTM47020).
The status outlasts the move. After 10 to 13 years of UK residence you stay in scope for 3 tax years after you leave, 1 more for each further year of residence, up to 10 after 20 years, and only 10 consecutive years of non-residence wipe the count (HMRC, IHTM47020). People who were not UK domiciled on October 30, 2024 and were non-resident in 2025-26 follow transitional rules instead (HMRC, IHTM47021).
For UK leavers, being in scope means 40% on the worldwide estate above the £325,000 (about $431,000) threshold, which can rise to £500,000 (about $663,000) when a home passes to children or grandchildren (GOV.UK).
| Worldwide estate: shares and cash, no homeLeft to 2 adult children | £1,000,000 (about $1,330,000) |
|---|---|
| Long-term UK resident at deathDomiciled in the UK on October 30, 2024, and 12 years of UK residence keep him in scope for 3 tax years after leaving | Yes |
| Nil-rate band | £325,000 (about $431,000) |
| Taxable above the band | £675,000 (about $895,000) |
| Rate | 40% |
| UK inheritance tax due | £270,000 (about $358,000) |
Illustrative. Dying in his 4th tax year of non-residence, he would owe UK tax only on UK assets; the UAE charges no inheritance, estate or gift tax (PwC).
Germany taxes the whole inheritance or gift when the person who dies or gives, or the heir, lives in Germany. German nationals count as residents for 5 years after moving abroad if they keep no home in Germany (ErbStG, section 2), so leaving Germany as a citizen frees foreign assets only after that. Those who move to a low-tax country such as the UAE while keeping essential economic interests in Germany stay taxable on German-source assets for up to 10 years (AStG, section 2 and section 4).
Dutch law reaches further: a Dutch national who lived in the Netherlands and dies or makes a gift within 10 years of leaving is treated as still living there (Successiewet 1956, article 3), so Dutch nationals leaving the Netherlands for Dubai or Singapore stay inside Dutch inheritance tax for those 10 years.
Ireland's reach runs through ordinary residence, which starts after 3 consecutive tax years of residence and continues for 3 tax years after you leave (Revenue), and its capital acquisitions tax applies whenever the person who dies or gives, or the beneficiary, is resident or ordinarily resident, though an exception may apply to someone domiciled abroad (Revenue).
Source: HMRC IHTM47020, ErbStG section 2, Successiewet 1956 article 3 and Revenue (Ireland), listed under Sources
Show the numbers
| Years after leaving | |
|---|---|
| Netherlands, Dutch nationals | 10 |
| UK, resident 20 of 20 years | 10 |
| Germany, German nationals | 5 |
| UK, resident 15 of 20 years | 5 |
| UK, resident 10 to 13 years | 3 |
| Ireland, Irish-domiciled, ordinarily resident | 3 |
| Netherlands, gifts by any former resident | 1 |
US citizens never age out: the estate and gift tax rules are generally the same for citizens abroad (IRS), so US expats keep US estate tax wherever they move, with a $15,000,000 basic exclusion for deaths in 2026 (IRS) and rates up to 40% (26 U.S.C. 2001(c)).
Tax on a foreign inheritance: where the heir lives
Countries that tax the heir can charge you on an inheritance from a parent who never lived there, because the tax turns on where you live when someone else dies.
A child who lives in Germany gets a €400,000 (about $455,000) allowance (ErbStG, section 16) and pays 7% to 30% on the rest, with the rate set by the size of the taxable amount (ErbStG, section 19).
€1,000,000 (about $1,140,000) from a mother in Dubai
Adult son lives in Lisbon
His mother has lived in the UAE for 12 years, is not a US citizen and holds everything there. The UAE charges no inheritance tax, and Portugal's stamp tax reaches only assets with a Portuguese link, such as property or bank deposits in Portugal (Stamp Tax Code, article 4), and exempts children anyway, so nothing is due in either country.
Adult son lives in Berlin
As a German resident he is taxed on the whole inheritance: €1,000,000 (about $1,140,000) less the €15,000 (about $17,100) lump sum for estate costs (ErbStG, section 10) and his €400,000 (about $455,000) allowance leaves €585,000 (about $666,000), taxed at 15%, so he owes €87,750 (about $99,800) (ErbStG, sections 16 and 19).
France taxes worldwide assets passing to an heir who has been French resident for at least 6 of the last 10 years, even when the person who died lived elsewhere (PwC France). Direct-line heirs each get a €100,000 (about $114,000) allowance before progressive rates, and unrelated heirs pay 60% after a €1,594 (about $1,810) allowance (PwC France).
Spain charges its inheritance tax on what Spanish tax residents inherit, wherever the assets are (Law 29/1987, article 6), at state rates from 7.65% to 34% that its autonomous communities can change, and many of them grant significant relief (PwC Spain).
The UK and the US do not tax the heir. In the UK you do not usually owe tax on an inheritance when you inherit it, though income and gains from it can be taxed later (GOV.UK).
A US citizen or resident who receives more than $100,000 in a year from a nonresident alien or a foreign estate owes no tax on it but must report it on Form 3520, and a missing report costs 5% of the gift for each month, up to 25% (IRS).
Gift tax abroad: lifetime gifts follow the same rules
The countries above add rules so that a gift shortly before a death or right after a move does not escape the tax.
In the UK, a gift is taxed only if you give away more than £325,000 (about $431,000) and die within 7 years, with taper relief lowering the rate on some older gifts (GOV.UK).
The Netherlands treats anyone who lived there and makes a gift within 1 year of leaving as still resident, Dutch national or not (Successiewet 1956, article 3).
US citizens can give $19,000 per recipient in 2026 under the annual gift exclusion (IRS).
Some countries tax gifts as income instead. Mexico has no specific gift tax, but gifts count as income: gifts from a spouse, parents, grandparents or children are exempt, while gifts between siblings are not (PwC Mexico).
Estates taxed twice: treaties and foreign tax credits
The tax treaties most people rely on follow the OECD Model, which applies to taxes on income and on capital (OECD Model, Article 2), so the treaty that decides where your online income is taxed says nothing about an inheritance.
Estate and gift tax treaties are separate and few. The UK has 10: conventions with Ireland, South Africa, the US, the Netherlands, Sweden and Switzerland, and older treaties with France, Italy, India and Pakistan (GOV.UK).
Where no treaty applies, the UK gives unilateral relief: a credit for foreign tax on property situated abroad, capped at the UK tax charged on that same property (HMRC, IHTM27185).
US estate tax treaties can give a non-resident's estate a share of the unified credit or exempt some US assets, claimed on Form 706-NA with Form 8833 (IRS).
Moving to a country with no inheritance tax: what it changes
Moving to one of the countries with no inheritance tax means your new home adds no tax of its own, and every other claim above stays in place. The UAE has no inheritance, estate or gift tax (PwC), Singapore abolished estate duty for deaths from February 15, 2008 (PwC), and Hong Kong has no estate duty or gift tax (PwC).
Others exempt close family, as Monaco does. Portugal's stamp tax on inheritances and gifts exempts a spouse or partner, children and parents (Stamp Tax Code, article 6), though a gift of property in Portugal still pays 0.8% (PwC Portugal).
David's note
If I had no US passport and lived abroad, I would hold US shares through a fund incorporated outside the US, such as an Irish-domiciled ETF, rather than a US-listed one. Shares of a non-US company are not US assets (26 CFR 20.2105-1(f)), so the same portfolio never brings the $60,000 Form 706-NA line into play.
Inheritance tax steps when you live abroad
Estate checks when you live abroad
- List every asset by the country it sits in, and mark land, buildings and US shares, which stay taxable there whatever you do.
- Count your tax years of residence in each country over the last 20, and note the year each claim ends: up to 10 tax years for the UK, 5 years for German nationals (up to 10 for German-source assets after a move to a low-tax country), 10 for Dutch nationals.
- Write down where each heir lives, since Germany, France, Spain and Ireland can tax an heir on an inheritance from abroad.
- If you are a US citizen or resident, report gifts and bequests from a nonresident alien or a foreign estate above $100,000 a year on Form 3520 (IRS).
- Time large gifts: a UK gift needs 7 years to drop out of inheritance tax, and a Dutch gift within 1 year of leaving is taxed as a resident's.
