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Czech Republic Inheritance and Gift Tax Guide

The Czech Republic does not have a separate inheritance or gift tax — both were abolished in 2014. Inheritance is fully exempt from personal income tax for all beneficiaries regardless of relationship. Gifts between close family members (spouse, direct line, siblings) are exempt from tax. Gifts to other persons are treated as taxable other income under IIT at 15% (or 23% for high earners). All amounts in CZK.

The Czech Republic abolished its inheritance tax (daň dědická) and gift tax (daň darovací) effective 1 January 2014 as part of a major tax reform. Both types of transfers were brought under the Income Tax Act (zákon o daních z příjmů) with broad exemptions. For related guidance, see our Personal Tax Guide →, Capital Gains Guide →, and Wealth Tax Guide →.

Inheritance — Fully Exempt

  • No inheritance tax: Inheritance (dědění) is fully exempt from all Czech taxes since 2014. There is no inheritance tax, no estate tax, and the inherited assets are not subject to personal income tax. This applies regardless of: the relationship between the deceased and the heir, the value of the inheritance, and the type of assets inherited (cash, real estate, securities, business interests).
  • No reporting obligation: Heirs do not need to file any tax return for inheritance purposes. The only administrative step is the court probate proceeding (dědictví) which determines the distribution of the estate and transfers legal title. The court determines the inheritance tax is zero.
  • Step-up in basis: For inherited securities and real estate, the heir's acquisition cost for future capital gains purposes is the market value at the date of death (or the date of the court decision on inheritance). This means that if the heir sells the inherited asset immediately, there is no capital gain because the cost basis equals the sale price. If the heir holds the asset, the 3-year (securities) or 5-year (property) time test starts from the date of inheritance.
  • Foreign inheritance: Czech residents inheriting assets from abroad are not subject to Czech tax on the inheritance. However, if the foreign country imposes inheritance tax, no Czech tax credit is available (since Czech Republic does not tax inheritance at all).

Gift Tax — Exempt for Family

  • No separate gift tax: Since 2014, gifts are not subject to a separate gift tax. Instead, gifts are treated as other income (ostatní příjmy) under Section 10 of the Income Tax Act, with a broad exemption for gifts between close family members.
  • Family exemption: Gifts between the following persons are fully exempt: spouses (manželé), direct line relatives (parents, children, grandchildren, grandparents), siblings (sourozenci), aunts/uncles and nieces/nephews (strýc/teta — synovec/neteř), and persons living in the same household for at least 1 year before the gift. Also exempt: gifts between persons who are related by marriage (e.g., mother-in-law) if the spouse is still alive.
  • No limit on family exemption: There is no monetary limit on the family exemption — a parent can give a child CZK 10,000,000 entirely tax-free. The exemption applies regardless of the value of the gift, as long as the relationship qualifies.
  • Gifts to non-family: Gifts to persons who are not covered by the family exemption are taxable as other income at 15% (or 23% if total income exceeds the solidarity surcharge threshold). The taxable amount is the market value of the gift. The first CZK 30,000 in gifts per year from a single donor may be exempt (de minimis threshold — gifts below this amount from non-family are not considered taxable income).

Estate Planning Considerations

  • No forced heirship: Unlike many civil law countries, Czech law allows relatively free disposition of assets by will (závěť). However, certain categories of heirs (descendants and the spouse) have a right to a compulsory share (povinný díl) — typically one-half of their intestate share. This cannot be completely disinherited without a valid legal reason.
  • Gift structuring: Because gifts between family members are unlimited and tax-free, many Czech families use lifetime gifting as a simple estate planning tool. Assets can be transferred gradually to children or other relatives without any tax cost. The donee's basis in the gifted asset is the donor's original acquisition cost (carryover basis) — not fair market value at the date of gift (unlike inheritance, where basis steps up).
  • Trusts and foundations: The Czech Republic does not recognise common-law trusts. However, the nadační fond (foundation fund) and svěřenský fond (trust fund) are available under Czech law since 2014. A svěřenský fond is a fiduciary arrangement where assets are managed by a trustee (svěřenský správce) for the benefit of beneficiaries. Income generated by the trust fund is taxed at the fund level (19% corporate rate) and distributions to beneficiaries may be exempt (if they qualify as family gifts) or taxable. Trust funds require professional administration and registration with the register of trust funds.
  • International aspects: For Czech residents with assets abroad, or non-residents with assets in the Czech Republic, inheritance planning should consider the tax treatment in both countries. The Czech Republic's zero inheritance tax means that Czech-situs assets inherited by foreign residents are not taxed in the Czech Republic. Conversely, Czech residents inheriting foreign assets may be subject to foreign inheritance tax without a Czech credit.