Inheritance Tax in Ukraine

Obtaining an inheritance raises a lot of questions: the procedure of obtaining, who to contact, the terms of registration, etc. But today we will talk about one of the questions related to the monetary aspect of obtaining an inheritance - how to deal with the taxes to be paid and when? 

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What taxes will you have to pay when getting an inheritance?

To begin with, let’s say that both a citizen of Ukraine and a representative of another country, i.e. a non-resident, can obtain an inheritance in Ukraine. 

In order to understand what kind of tax you will have to pay, we will consider the different types of inherited property subject to taxation: 

  • Real estate: apartments, flats, private houses, as well as the property that is under construction, land plots, etc.;
  • Movable property: cars, jewelry, works of art; 
  • Commercial property: securities, shares, share interest in commercial organizations, intellectual property;
  • Money/cash held in banks, in safe deposit boxes, or in circulation of companies, etc.;
  • Insurance reimbursement, money from pension accounts and deposits from various foundations: state or private.

It is important to understand what type or types of property you inherit, as there are situations when different taxes on different types of property inheritance apply to the same category of people. For example, tax benefits on the inheritance of movable and immovable property, etc.

An experienced lawyer can help you get a handle on the tax rates depending on the type of property.

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There are several types of taxation rates for inherited property

The amount of inheritance tax is determined by the degree of kinship between successors and their testator. As of May 2020, the following tax rates can be distinguished:

  • 0 %;
  • 5 %;
  • 18 %.

The 0% rate for all types of property is determined for those relatives who belong to the first line of kinship, namely: 

  • parents;
  • husband / wife;
  • children, including foster children;
  • children of either spouse who are born in other marriages.

Also, the category of people who do not pay inheritance taxes includes those belonging to the second line of kinship: 

  • brothers / sisters;
  • grandmothers / grandfathers;
  • grandchildren.

It’s worth remembering that there are citizens who have tax benefits in the form of 0% taxation.  They include: 

  • Group 1 disabled people;
  • children with disabilities;
  • parentless children.

Such tax benefits apply exclusively to movable and immovable property. All other types of inheritance are subject to taxation at a standard rate.

The 5% tax rate is determined for all subjects, regardless of whether they are relatives of the testator or not, except for those relatives for whom this rate is 0%. 

Also, all those who are not in the first and second line of kinship should make sure that their inheritance is assessed by experts and determine the amount (tax) to be paid to the state budget for this inheritance.  

The 18% tax rate applies to successors who are residents of Ukraine living abroad. Also 18% tax is paid to the state budget by foreigners, regardless of the degree of kinship with the testator. 

This procedure may become more complicated for such successors of inheritance than for others, especially if they are living outside Ukraine. If you are unwilling or unable to come to Ukraine, and deal with the procedure yourself, it will be useful to consult experienced lawyers, draw up a power of attorney and let them provide you with qualified assistance in this matter. 

When obtaining an inheritance, all the heirs should remember that for late and incorrect payment of taxes on the received property - the liability in the form of fines or even seizure of property is borne directly by the one who received the property. 

If you want to go through the inheritance procedure with the minimum time and effort, don’t hesitate to call us. We can take over the technical side of the process.

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