Estonia Inheritance and Gift Tax Guide 2026

Overview — No Inheritance or Gift Tax

Estonia abolished inheritance tax and gift tax in 2015, making it one of the most favourable jurisdictions in Europe for intergenerational wealth transfers. There is no tax on the receipt of inherited assets or gifts, regardless of the relationship between the donor and recipient or the value of the assets transferred. This applies to both residents and non-residents for Estonian-situated assets.

Scope of Tax-Free Transfers

The following transfers are completely free of any estate or gift tax:

• Inheritance of cash, bank accounts, securities, and other financial assets
• Inheritance of real estate located in Estonia
• Inheritance of business interests (shares in Estonian companies)
• Gifts of cash and movable property between living persons
• Gifts of immovable property between certain close relatives
• Trust distributions (Estonia does not recognise trusts in domestic law)

Exception — First Transfer of Immovable Property

The only exception to the no-gift-tax rule applies to the first transfer of newly constructed immovable property. If a gift of immovable property is made within five years of the property's first transfer (i.e., the first sale or transfer after construction), a stamp duty-like tax may apply. This is not a true gift tax but rather a recapture of the VAT exemption that applied to the first transfer. This exception is limited in scope and rarely applies in practice.

Inheritance Procedure

While there is no inheritance tax, the inheritance process in Estonia involves certain steps:

• Succession is governed by the Estonian Law of Succession Act (Pärimisseadus)
• The estate is administered through a notary who issues a certificate of inheritance (pärimistunnistus)
• Notary fees are regulated by law and are based on the value of the estate (approximately 0.5-1%)
• State fees for the certificate of inheritance apply (typically EUR 20-200 depending on estate value)
• Inherited assets must be reported for land register and other registration purposes

Intestate Succession Rules

If there is no will, Estonian law provides for intestate succession:

• First class: Spouse, children, and descendants of the deceased
• Second class: Parents and their descendants (if no first-class heirs)
• Third class: Grandparents and their descendants
• The spouse inherits at least the portion of the estate equal to the share of one child

Estate Planning Considerations

Despite the absence of inheritance tax, estate planning remains important:

• Wills: A properly drafted will simplifies the inheritance process and allows customised distribution of assets
• Forced heirship: Estonian law provides for forced heirship — certain close relatives (spouse, children) are entitled to a compulsory portion of the estate
• Corporate succession: Business succession can be managed through shareholder agreements and corporate governance documents
• Cross-border estates: Estonian residents with assets abroad may be subject to inheritance or estate taxes in the jurisdiction where the assets are located

Comparison with Other Countries

Estonia's absence of inheritance and gift tax is a significant advantage compared to many European countries:

• Germany: Inheritance tax up to 50% (after EUR 400,000 spouse exemption)
• France: Inheritance tax up to 60% (after EUR 100,000 spouse exemption)
• UK: Inheritance tax at 40% (with EUR 325,000 nil-rate band)
• Finland: Inheritance tax 7-33% (after EUR 20,000 spouse exemption)
• Estonia: 0% — no tax at all

FAQs

Do I need to pay tax on an inheritance from an Estonian estate?

No. Estonia does not impose inheritance tax on any inherited assets, regardless of the value or the relationship to the deceased.

Are gifts between family members taxable?

No. Gifts between any persons — whether family members or not — are generally tax-free. The only narrow exception is for the first transfer of newly built immovable property within five years of construction.

Do I need to report an inheritance or gift to the tax authorities?

Inheritances and gifts do not need to be reported to EMTA for tax purposes. However, the inheritance process requires notarisation and registration with the Estonian Land Register for real estate.

Disclaimer

This guide provides general information about Estonian inheritance and gift tax for the 2026 tax year. Tax laws and rates may change. Always consult with a qualified Estonian tax advisor or notary for advice specific to your situation. InvestmentKit does not provide legal or tax advice.