Finland Inheritance & Gift Tax Guide 2026 (Perintö- ja Lahjavero)
Finland imposes inheritance and gift taxes at progressive rates. Class I (close family) pays 7-19%, Class II pays 10-26%, and Class III (non-relatives) pays 13-33%. The first €20,000 for close family and €5,000 for other classes is tax-free.
Inheritance tax (perintövero) and gift tax (lahjavero) in Finland are governed by the same law and the same progressive rate structure. The tax is calculated on the net value of the inheritance or gift after deducting debts and funeral expenses (for inheritance). The tax class depends on the relationship between the deceased/donor and the beneficiary. The tax rates are progressive with both the taxable amount and the tax class determining the effective rate.
Tax Classes and Exemptions
Class I includes spouses, registered partners, direct descendants (children, grandchildren), parents, and adopted children. The tax-free allowance is €20,000 for Class I. Class II includes siblings, half-siblings, descendants of siblings (nieces and nephews), and former spouses. The tax-free allowance is €5,000. Class III includes all other beneficiaries (non-relatives, friends, distant relatives). The tax-free allowance is also €5,000. Spouses receive a special additional deduction: besides the €20,000 allowance, a surviving spouse may deduct up to €60,000 of the estate's value (the spouse's share of the estate is partially protected).
Inheritance Tax Rates 2026
Class I rates (applicable to the portion above €20,000): €20,000-€40,000 taxed at 7%, €40,000-€60,000 at 9%, €60,000-€200,000 at 11%, €200,000-€500,000 at 14%, €500,000-€1,000,000 at 17%, and above €1,000,000 at 19%. The marginal rate for Class I tops out at 19% for the highest bracket. Class II rates (above €5,000 allowance): €5,000-€25,000 at 10%, €25,000-€55,000 at 13%, €55,000-€145,000 at 16%, €145,000-€295,000 at 20%, and above €295,000 at 26%. Class III rates (above €5,000 allowance): €5,000-€25,000 at 13%, €25,000-€55,000 at 16%, €55,000-€145,000 at 20%, €145,000-€295,000 at 24%, and above €295,000 at 33%.
Gift Tax Rules
Gifts are subject to the same tax rates and classes as inheritances. The gift tax is calculated separately for each gift from the same donor to the same recipient within a 3-year period — the value of previous gifts within that period is aggregated for determining the tax bracket. Gifts under €5,000 over 3 years are exempt from gift tax for all classes, but if a gift exceeds this threshold, the entire amount (including the exempt portion) becomes taxable (subject to each class's specific exemption). Small customary gifts (e.g., birthday or Christmas presents) are not taxable. Gifts between spouses are entirely tax-free, regardless of amount.
Family Business and Farm Succession
Special relief is available for family businesses and farms. Upon application, 50% of the value of business or agricultural assets may be exempt from the tax base, subject to the condition that the beneficiary continues the business for at least 5 years. This reduction applies to the portion of the inheritance or gift consisting of business or farm assets. The tax can also be paid in instalments over up to 10 years for business and farm succession cases. These provisions help ensure the continuity of family businesses across generations without forcing asset sales to pay inheritance tax.
Filing and Payment
Inheritance tax must be declared within 3 months of the date of death (the executor or beneficiary must file an inventory and tax return). The Tax Administration issues a tax decision based on the submitted estate inventory. Payment is due within 30 days of the tax decision. For gift tax, a gift tax return must be filed within 3 months of receiving the gift if it exceeds the tax-free threshold. Late filing results in a penalty of approximately 20% of the tax due. Payment plans for inheritance tax are available in cases of hardship, particularly for family farms and businesses.
International Considerations
Finland taxes the worldwide assets of resident deceased persons. Non-residents are taxed only on Finnish-situs assets (real estate in Finland, Finnish business assets). Tax treaties may provide relief from double taxation. EU succession regulations allow some flexibility in choosing the applicable law. Finland does not have an estate tax (a tax on the estate itself) — instead, inheritance tax is imposed on each beneficiary individually. This means the tax rate depends on who inherits, not the total estate value.
FAQs
What is the inheritance tax rate for a child inheriting €100,000?
A child is Class I. After the €20,000 exemption, €80,000 is taxable. The tax is approximately €7,600 (7% on €20,000 + 9% on €20,000 + 11% on €40,000).
Are gifts between spouses taxable?
No, gifts between spouses are entirely exempt from gift tax regardless of the amount.
What happens if I do not file an inheritance tax return?
Late filing incurs a penalty of approximately 20% of the tax due. The Tax Administration will also assess the tax based on available information.