I recently heard about the fact that everyone residing in Finland needs to pay tax on inheritance, even if it is from their own country. [Vero-Inheritance taxation in international tax situations](https://www.vero.fi/en/individuals/property/inheritance/international_inheritance_tax_situations/).

The situation is that I might soon inherit a house (or at least half of it) in Croatia, my home country, a house built by my grandfather. Something that does not add to me is why Finland thinks it would have a right to tax something in my home country owned by my family in Croatia? I happily pay all income taxes in Finland since I live and work here, but this???

I could somehow understand if that would be a property from a 3rd country, but not from your own home country…

The house is first of all not all mine and it requires significant investment, so in other words, I am not inheriting a bunch of money, it is all a cost…

Can someone explain to me the point in this and then is there anything to be done to avoid paying this to Finland?

13 comments

  1. Inheritance tax is great and we really love it.

    Your great grandfather dies, your grandpa inherits a mansion -> tax

    Your granpa dies, you inherit the mansion -> tax

    You die, your children inherit the mansion -> tax

    etc.

    Of course, not every penny is taxed and there are limits etc but it is quite a bullshit deal, especially if all the inheritance is tied to real estate or similar and not cold hard cash.

    But I guess there is also the same law when inheriting something from another country. I remember my father was mailed a $10 000 check related to an american aunt passing away. Technically you have to report these to the tax authorities buuuut, you know, what if you didn’t?

  2. – The decedent lived in Finland. You live outside of Finland and you inherit a house or apartment not located in Finland. You must pay Finnish inheritance tax. Not only the inheritors who live in Finland but also those living in a foreign country must pay inheritance tax to Finland.

    -The decedent lived in another country, not Finland. You live in Finland and you inherit cash. You and all the other inheritors living in Finland must pay inheritance tax to Finland.

    -The decedent lived in another country and so do you. You inherit a summer cottage located in Finland. You must pay inheritance tax to Finland, however, only for the summer cottage because it is treated as immovable property. 

    ​

    The way i understand these points from your linked article from Vero website. You do not need to pay inheritance because the decedent lived in another country and you do not inherit cash?

  3. Get a valuation on your half of the house that states it is essentially worthless and that will be that, tax authorities do share info but normally only on request by the way and the reason you pay tax on it here and not in Croatia would be because you are a resident here and get services and health care and so on so you have the rights of a Finn and are treated like one

  4. The house’s value will most likely be assessed in Croatia together with the rest of the Estate when it comes to organising the succession and calculating possible local inheritance tax. Based on this official value you will basically be taxed in Finland. Typically taxes already paid abroad would be deductible in Finland. Also, do check whether there is a mutual tax agreement between Croatia and Finland.

    Useful info on inheriting in Finland: [https://www.personalfinance.fi/inheritance-tax-finland/](https://www.personalfinance.fi/inheritance-tax-finland/)

  5. I’ve been wondering about this too. If I’m a resident and I inherited a house in the UK, do I have to pay inheritance tax in both countries, or just Finland?

  6. The point of inheritance tax is that you are receiving wealth, like a gift.
    It is taxed at a lower percent than gifts, because it is inheritance.

    I don’t know how it is in Croatia, but here if you receive a part of a house as inheritance, the one who wants to live in it, buys others’ shares for it.

  7. If the property was put in a trust fund then you could avoid paying tax until it is sold. Also you could pass the property down a generation and still the tax is only due when it is sold.

    This is only my understanding of how I have seen people do it here.

  8. If I inherit something abroad (outside EU) and the money goes to an account there. How is that related to Finland?

  9. When you are a about to inherit the house you “move” to Croatia, become an owner of the house, next week you “move” back and voila!

    Is this possible?

  11. I have similar issue incoming. My dad decided to share some of his wealth with me and my brother. He will sell extra places and send us money for our shares.

    Do i have to pay tax to Finland for that? Except me being here type A residence permit, I have no relation with Finland.

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