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?

Inheritance in Ukraine may be received both by a citizen of Ukraine and by a foreigner. In addition, citizens of Ukraine who have been residing outside of Ukraine for a long time are equal to foreigners for inheritance tax purposes. 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’s important to understand what type or types of property you will inherit, since there are situations where different inheritance taxes apply to the same category of inheritors. For example, inheritance tax exemptions for movable and immovable property, etc.

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 inheritors 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. 

For such heirs this procedure may be more complicated than for others, especially if they are outside of Ukraine. In the case of unwillingness or lack of opportunity to come to Ukraine and to deal with the procedure yourself, you can contact our company.

Please note! Our lawyers will analyze exactly your situation, taking into account the above-mentioned features of the inheritance, advise how to optimize taxation, and will help to come into the inheritance remotely (by power of attorney from the heir).