Denmark Inheritance and Gift Tax Guide (Boafgift)

Inheritance Tax (Boafgift) Rates

Class 1 — 15%: Applies to: spouse (ægtefælle), registered partner, children (including adopted, stepchildren, foster children), grandchildren, great-grandchildren, parents, grandparents, the deceased's siblings (if the sibling lived with the deceased for at least 2 years before death), and the deceased's or spouse's former spouse under certain conditions. The first ~333,200 DKK (2026 level, indexed annually) per beneficiary is tax-free (the bundfradrag). The balance above the threshold is taxed at 15%.

Class 2 — 36.25%: Applies to all other beneficiaries (nieces, nephews, cousins, friends, unmarried partners who do not meet the 2-year cohabitation test, charitable organisations, and others). There is no bundfradrag for class 2 beneficiaries — the entire inheritance is taxed at 36.25% from the first krone. Certain charitable organisations (almene velgørende organisationer approved by SKAT) may be exempt from boafgift if the gift is for charitable purposes.

Spousal exemption — uskiftet bo: The surviving spouse can elect uskiftet bo (undivided estate), meaning the estate is not distributed to the heirs at the first death. Instead, the surviving spouse inherits all assets without paying inheritance tax at that point. The boafgift is deferred until the surviving spouse dies, remarries, or enters a new registered partnership. If the surviving spouse subsequently gives up the uskiftet bo or enters a new marriage, the estate is then distributed and taxed as if the first spouse had died at that time. This is a powerful estate planning tool — it avoids immediate tax and allows the surviving spouse to maintain the same standard of living. The election must be made within 6 months of death through the probate court.

Joint property (fælleseje vs særeje): If the couple owned assets as fælleseje (joint marital property), the surviving spouse inherits their half automatically (tax-free under the marital property rules), plus half of the deceased's share under the inheritance rules. If særeje (separate property) applies, each spouse's assets are kept separate — only the deceased's share is subject to boafgift. Most married couples in Denmark are presumed to have fælleseje unless a separation agreement (ægtepagt) states otherwise.

Gift Tax (Gaveafgift)

Annual allowance — class 1 (2026): Gifts to children, grandchildren, and great-grandchildren are tax-free up to ~72,000 DKK per donor per recipient per year (the annual allowance, which is the same as the personal tax-free amount under boafgift). Gifts exceeding this amount are taxed at 15% on the excess. The allowance is per parent — so two parents can each give ~72,000 DKK to a child (total ~144,000 DKK tax-free per year per child). Grandparents can also make gifts up to the same annual limit to each grandchild.

Class 2 gifts: Gifts to class 2 recipients (e.g., friends, nieces, nephews, cousins) are taxable from the first krone at 36.25%. There is no annual allowance for class 2. Any transfer of value without full market consideration is treated as a gift and taxed accordingly.

Spousal gifts: Gifts between spouses are completely tax-free with no limit. This includes both during marriage and in connection with divorce settlements (bodeling).

Education and maintenance gifts: Gifts for the recipient's upkeep and education (underholdning og uddannelse) are exempt from gift tax if they are reasonable and customary. This covers: payments for school fees, living expenses for children under study, and similar ongoing support. There is no fixed DKK limit — it depends on what is reasonable in the circumstances. Gifts that go beyond maintenance and education (e.g., buying a flat for a child) are subject to the standard gift tax rules.

Gifts to charitable organisations: Gifts to SKAT-approved charitable organisations (almene velgørende organisationer) are deductible for the donor (up to ~16,600 DKK per year for individuals) and tax-free for the recipient. Organisations must be pre-approved by SKAT to qualify.

Estate Administration and Filing

Probate court (skifteretten): Within 14 days of death, the heirs or executor must notify the probate court. The court determines whether the estate can be handled as: (a) private probate (heirs handle it themselves, all heirs must consent, and the estate is solvent), (b) public probate (a bobestyrer appointed by the court — required if the estate is insolvent, if heirs disagree, or if there are unknown heirs), or (c) auxiliary probate (for simple estates where the surviving spouse takes everything).

Boafgiftsangivelse (estate tax return): The executor must file the boafgiftsangivelse with SKAT within 6 months of death (or 6 months from the end of the month of death). The return must list: all assets and liabilities of the deceased at the date of death (valued at market value), the value passing to each beneficiary, the applicable boafgift class and bundfradrag for each beneficiary, and the tax due. Assets include: real estate (valued at the official property valuation or a certified appraisal), bank accounts, shares and investments, pension savings (some pension types are not subject to boafgift — see section below), vehicles, art and collectibles, and business interests. Liabilities reduce the taxable estate.

Payment of boafgift: The inheritance tax is due within 6 months of death, though SKAT may grant an extension in certain cases (e.g., if the estate includes illiquid assets that need to be sold). Late payment incurs interest at approximately 3.5% annually. The tax can be paid from the estate's funds before distribution to heirs.

Pensions and Life Insurance

Ratepension and livrente: Payouts from ratepension and livrente (life annuities) are not subject to boafgift because they are treated as income of the beneficiary and taxed as personal income when received. The deceased's pension savings are therefore not part of the estate for boafgift purposes — the beneficiary pays income tax on the payouts instead. This is a significant distinction: transferring wealth through pension designations can bypass boafgift entirely.

ALD (alderdomsopsparing): The ALD (old age savings account) balance is paid out to the beneficiary as a lump sum upon death. This payout is taxable at 40% (the PAL tax rate) at the time of payout, not subject to boafgift. The net amount after PAL tax is distributed to the beneficiary tax-free.

Life insurance (livsforsikring): Life insurance payouts to a named beneficiary are generally tax-free for the beneficiary and not subject to boafgift, provided the insurance is a genuine risk insurance (not an investment-linked policy). If the policy is investment-linked, the savings element may be subject to boafgift. Check the policy terms carefully.

Foreign pensions: Foreign pension schemes received by a Danish-resident beneficiary may be subject to Danish income tax (as pension income) or boafgift depending on the nature of the scheme and the applicable tax treaty. The treatment is complex — a binding ruling from SKAT is recommended for significant foreign pensions.

Cross-Border Estates

Danish resident, foreign assets: If the deceased was a Danish resident at death, their worldwide assets are subject to Danish boafgift. However, tax treaties with certain countries may allocate taxing rights over immovable property (real estate) to the country where the property is located. In such cases, the foreign real estate is excluded from the Danish taxable estate (with progression — it may affect the marginal rate on other assets). Foreign movable assets (shares, bank accounts) are generally taxable in Denmark if the deceased was a Danish resident, subject to the boafgift treaty provisions.

Non-Danish resident, Danish assets: If the deceased was not a Danish resident but owned assets in Denmark (typically Danish real estate), those assets are subject to limited Danish boafgift. The rate depends on the beneficiary's relationship to the deceased — class 1 rates apply if the beneficiary is a spouse, child, etc., even if they are non-resident. Danish real estate valued at over ~333,200 DKK may trigger Danish inheritance tax obligations. The non-resident executor must file a boafgiftsangivelse with SKAT within 6 months.

EU Succession Regulation (Brussels IV): Since 17 August 2015, the EU Succession Regulation (650/2012) governs cross-border inheritance within the EU (Denmark has opted out). For Danish residents with assets in EU countries, each country's national law applies — there is no unified EU-wide probate. Denmark is not party to the regulation, so Danish probate rules apply to Danish assets and Danish-resident estates, while EU member state law applies to assets located in those states. A European Certificate of Succession can be issued by EU member states but is not recognised in Denmark. Practical tip: if you own assets in both Denmark and an EU country, you may face parallel probate proceedings.

Succession Planning Strategies

Annual gift programme: The simplest strategy — each parent gifts up to ~72,000 DKK per year to each child (and each grandchild) within the annual allowance. Over 10 years with 2 parents and 2 children, this transfers ~2.88M DKK tax-free. Gifts exceeding the annual allowance are taxed at 15% (class 1), which is still lower than the top marginal income tax rate or the 36.25% class 2 rate.

Generationsskifte (business succession): Transferring a family business to the next generation receives preferential treatment under the generationsskifte rules. The transfer is treated as a gift of the shares at their calculated value (beregnet værdi), which is typically lower than market value, reducing the gift tax. The calculation formula takes the company's net asset value plus 6% of the company's capitalised earnings value (based on a 5-year average). Gift tax on business succession is 15% on the excess above the annual allowance (class 1). The rules require that: (a) the company is an active business (not passive investment), (b) the transferor or their spouse has owned the shares for at least 1 year, and (c) the recipient continues the business for at least 3 years. If the recipient sells the shares within 3 years, the tax benefit is recaptured. For more on company structures, see our Company Forms Guide →.

Trusts and foundations: Denmark does not recognise the common law trust concept (except for a few tax treaty purposes). A Danish foundation (fond) is a separate legal entity that can be used for succession planning, but the founder must irrevocably transfer assets to it, and the foundation must have a charitable or specified purpose. Foundations are subject to corporate tax at 22% on their investment income. A discretionary trust established under foreign law may be treated as a transparent entity or as a taxable entity by SKAT depending on its characteristics. For more on foundations, see our Foundations Guide →.

Life insurance and pension designations: Designating a beneficiary for your ratepension, livrente, or ALD avoids boafgift (as described above). Life insurance payouts to named beneficiaries are also outside the estate. Combined, these instruments can pass significant wealth outside the boafgift system entirely.

Related Guides

• Personal Tax Guide → — income tax, deductions, annual assessment
• Property Tax Guide → — property valuation, ejendomsværdiskat, grundskyld
• Housing Tax Freeze Guide → — 2024 property tax freeze, transition rules
• Pension Tax Guide → — pension taxation, PAL, ratepension rules
• Company Forms Guide → — ApS, A/S, IVS legal structures
• Foundations Guide → — fonds, foundation taxation
• Cross-Border Tax Guide → — international inheritance, double taxation