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Lithuania Inheritance & Gift Tax Guide 2026

Lithuania does not impose inheritance tax or gift tax on transfers between spouses or to direct line descendants (children, grandchildren, parents). This favourable treatment makes Lithuania an attractive jurisdiction for estate planning and wealth transfer. Transfers between more distant relatives or non-relatives may be subject to tax at progressive rates. There is no separate inheritance tax — transfers are treated under the personal income tax (IIT) framework.

Overview — No Inheritance/Gift Tax for Close Family

Lithuania does not have a separate inheritance or gift tax. Instead, inherited or gifted property is generally treated as income under the personal income tax (IIT) system. However, the following categories of recipients are exempt from tax on inherited or gifted property:

  • Spouses: All transfers between spouses, whether by inheritance, gift, or donation, are exempt from tax
  • Direct line descendants: Children (including adopted children), grandchildren, and great-grandchildren — exempt
  • Direct line ascendants: Parents, grandparents, and great-grandparents — exempt
  • Other close relatives: Siblings, nephews, and nieces may be eligible for reduced rates or exemptions depending on the circumstances

This exemption applies to both real estate, cash, securities, and other assets. There is no cap on the value of exempt transfers.

Tax Treatment for Non-Relatives

Inherited or gifted property received by individuals who are not in the exempt categories (e.g., friends, distant relatives) is treated as taxable income. The tax treatment depends on the type of asset:

  • Cash and movable property: Taxable at the recipient's IIT rate (20–32%)
  • Real estate: Subject to real estate transfer tax (0–10% sliding scale) plus IIT on any excess
  • Securities: Taxable at 15% capital gains tax on any gain, but the inherited value (cost basis) is generally the market value at the date of death/gift

The donor/grantor may also be subject to the real estate transfer tax on gifts of immovable property to non-exempt recipients.

Exemptions and Reliefs

Key exemptions include:

  • Primary residence: The surviving spouse inheriting the primary residence is exempt from all taxes
  • Life insurance proceeds: Payouts from life insurance policies to named beneficiaries are generally tax-free
  • Pension lump sums: Accumulated pension benefits paid to beneficiaries on death are exempt
  • Charitable bequests: Gifts and bequests to qualifying charitable organisations are exempt

Real Estate Transfer Tax on Gifts

When real estate is transferred by gift, the real estate transfer tax (0–10%) may apply. However, the tax is exempt for transfers between spouses and direct line relatives. For non-exempt transfers, the tax is calculated on the cadastral value of the property using the sliding scale (0% on first EUR 50,000, 2% on EUR 50,001–100,000, up to 10% on amounts over EUR 250,000).

Estate Planning Considerations

Key considerations for estate planning in Lithuania:

  • Wills: Lithuanian law permits wills in notarial form or holographic (handwritten) form. Foreign wills recognised under Lithuanian private international law may be valid
  • Forced heirship: Lithuanian law provides for forced heirship rights for minor children and disabled descendants (they must receive at least their legal share)
  • Trusts: Lithuanian law does not recognise common law trusts. Alternative structures (foundations, contractual arrangements) may be used for estate planning
  • International planning: Lithuania's extensive DTT network and EU membership facilitate cross-border estate planning

FAQs

Is there an inheritance tax return to file?

Exempt recipients (spouses, children, parents) generally do not need to file an inheritance tax return. Non-exempt recipients must report inherited or gifted property on their annual IIT return.

Are gifts from foreign relatives taxable?

Gifts from foreign relatives to Lithuanian residents are treated similarly. If the relative is a close family member (spouse, child, parent), the gift is exempt. Otherwise, it may be taxable as income.

Is there a gift tax on donations to charity?

No, donations to qualifying charitable organisations are exempt from gift tax and are also deductible for IIT purposes (up to a certain limit).

Disclaimer

This guide provides general information about Lithuanian inheritance and gift taxation for the 2026 tax year. Tax laws and rules may change. Always consult with a qualified Lithuanian tax advisor or estate planning professional for advice specific to your situation. InvestmentKit does not provide tax advice.