Most of Europe Taxes Inheritances Far Harder Than the U.S. Does

The Tax Foundation's 2026 survey of estate, inheritance and gift taxes in Europe, published August 24, 2026, found that 24 of the 35 countries it tracks still tax wealth transfers at death, in some cases at rates far higher than anything in the U.S. tax code. For American families with relatives, real estate, or business interests in Europe, the gap between the two systems can determine whether a cross-border inheritance arrives mostly intact or heavily reduced.

What changed

The Tax Foundation report lays out wide variation across Europe. France taxes transfers at 5% to 45% depending on the amount and the relationship between the parties, rising as high as 60% for distant relatives or unrelated heirs. Germany's rates run from 7% to 50%. Belgium and Spain top the list, with rates reaching 80% and 87.6% respectively for the most distantly related heirs. The UK's range runs 20% to 40%, and Ireland applies a flat 33%. Eleven countries, including Austria, Sweden, Norway, Estonia and Cyprus, impose no estate, inheritance or gift tax at all.

Who is affected

The comparison matters most to two overlapping groups: Americans who have inherited or expect to inherit assets located in a European country, and dual citizens or long-term expatriates whose own estates will pass through both U.S. and foreign tax systems. Business owners with operating subsidiaries or real estate held in high-rate countries such as France, Germany, Belgium or Spain face the largest potential exposure, since local inheritance tax generally applies based on where the asset sits or where the heir resides, not on the decedent's U.S. citizenship.

Why kinship, not just country, drives the rate

Nearly every European country with an inheritance tax scales the rate by how closely the heir is related to the decedent, a structural difference from the flat U.S. system, where the same 40% top rate and $15 million exemption apply regardless of whether the heir is a child, sibling, or unrelated friend. A spouse or child inheriting in France or Germany typically faces the lower end of the published range, while a niece, nephew, or unrelated beneficiary can land in the highest bracket on the very same estate. That means the country-level rate ranges the Tax Foundation publishes describe a spread, not a single applicable number, and the identity of the heir matters as much as the country and the size of the estate.

The after-tax math

The contrast with U.S. law is stark. In 2026, the federal estate tax exemption is $15 million per person, so the large majority of American estates owe no federal estate tax at all, and rates above the exemption top out at 40%. Example: a U.S. citizen who inherits a $2 million apartment from a distant relative in Belgium could face an inheritance tax bill as high as roughly $1.6 million under Belgium's top 80% bracket for unrelated heirs, an amount that would trigger zero U.S. estate tax if the same asset were held by a close relative in the United States. Even a closer relative inheriting the same property in France could owe up to 45%, or roughly $900,000, well beyond what any U.S. estate near the $15 million exemption would ever pay.

Moves to discuss with your advisor

Families with any cross-border inheritance exposure, an aging parent abroad, real estate held in Europe, or heirs living overseas, may want to discuss with an estate attorney familiar with the relevant country's rules whether local inheritance tax can be reduced through lifetime gifting, trusts recognized in that jurisdiction, or treaty relief, since the U.S. has estate and gift tax treaties with only a handful of European countries. A foreign inheritance tax paid may also be creditable against a U.S. estate tax liability in some circumstances, a question worth raising directly with a cross-border tax specialist rather than assuming double taxation is unavoidable.

What to watch

European inheritance tax rates and exemptions change more frequently than the headline structure suggests, and several countries have debated reforms in recent years to either broaden or narrow their bases. Families with recurring cross-border exposure should treat the current rate table as a starting point for planning, not a fixed number to rely on years in advance.

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