Inheritance – Taxation of assets belonging to Greek citizens located in Greece and the United States

Inheritance – Taxation of assets belonging to Greek citizens located in Greece and the United States

According to Article 3 of the Code of Provisions on Inheritance Tax, Gifts, Parental Benefits and Winnings from Games of Chance (Law 2961/2001 – hereinafter referred to as the “Code”), inheritance tax in Greece is levied on:

• Any property of any kind located in Greece, whether owned by Greek nationals or foreigners.
• Tangible or intangible movable property located abroad belonging to Greek nationals residing anywhere, as well as to foreign nationals residing in Greece.

 

With regard to the Convention between Greece and the USA (Legislative Decree 2734/1953, Government Gazette A’ 329/12.11.1953 – hereinafter “DTT”) for the avoidance of double taxation in relation to taxes on the estates of deceased persons, the following applies:

• Real estate located in Greece will not be subject to tax in the USA.
• Real estate located in the United States shall not be subject to tax in Greece.
• Tangible personal property, as well as banknotes and all types of money, are legal tender in the place of issue, as are cheques, and are considered to be located where they are physically located at the time of the deceased’s death.
• Company shares (including shares held for the benefit of the deceased by a person designated by him) are considered to be located in the place where the company was established or organised.
• Bonds, bank deposits and claims of any other nature, secured or unsecured, and any other assets not mentioned above, are considered to be located in the country where the deceased had his residence at the time of death.
• The Contracting State in which the deceased was resident or a citizen or national at the time of death and which imposes tax shall grant a deduction for the amount of tax imposed by the other Contracting State on assets located in the territory of that other Contracting State and included for tax purposes by both States, and the amount of the deduction shall not exceedthe tax imposed by the first State on the same property.
• No deduction shall be granted in respect of assets situated or deemed to be situated in both Contracting States.

 

Method of calculating inheritance tax

The tax imposed is determined according to the net value of the inheritance share and the relationship of the heir to the deceased, on the basis of which taxpayers are classified into three (3) categories.

 

Category A includes:

a) the spouse of the deceased,

b) the person who had entered into a cohabitation agreement with the deceased in accordance with the provisions of Law 3719/

2008 and which was dissolved upon the death of the latter, provided that the cohabitation lasted at least two years,

c) first-degree descendants (children from a legal marriage, children born out of wedlock to the mother, voluntarily or judicially recognised

voluntarily or judicially in relation to the father, legitimised by subsequent marriage or judicially in relation to both

parents),

d) second-degree blood descendants and

e) first-degree ascendants by blood.

 

The following fall under category B:

a) third and subsequent degree blood descendants,

b) second and subsequent degree ascendants,

c) voluntarily or judicially recognised children of the ascendants of the father who recognised them,

d) descendants of the recognised person vis-à-vis the person who recognised them and their ascendants,

e) siblings (full or half-siblings),

f) third-degree collateral blood relatives,

g) stepfathers and stepmothers,

h) children from the spouse’s previous marriage,

i) children by marriage (sons-in-law and daughters-in-law) and

j) ascendants by marriage (fathers-in-law and mothers-in-law).

 

Category C includes any other blood or in-law relative of the deceased or ex-spouse.

 

Inheritance tax is calculated on the basis of the following tax scales for each category:

 

 

Category A
Scale (€)	Rate (%)	Tax bracket (€)	Taxable property (€)	Tax due (€)
150,000	–	–	150,000	–
150,000	1	1,500	300,000	1,500
300,000	5	15,000	600,000	16,500
Excess	10

 

 

Category B
Scale (€)	Coefficient (%)	Tax bracket (€)	Taxable property (€)	Tax due (€)
30,000	–	–	30,000	–
70,000	5	3,500	100,000	3,500
200,000	10	20,000	300,000	23,500
Excess	20

 

Category C
Scale (€)	Coefficient (%)	Tax bracket (€)	Taxable property (€)	Tax due (€)
6,000	–	–	6,000	–
66,000	20	13,200	72,000	13,200
195,000	30	58,500	267,000	71,700
Excess	40

 

It should be noted that the acquisition of assets due to death up to the amount of four hundred thousand (400,000) euros per beneficiary, provided that the beneficiaries are the spouse and minor children of the deceased, is exempt, in which case the first tax-free bracket of the scale does not apply and the subsequent brackets are reduced accordingly. The exemption for the surviving spouse is granted provided that the marriage lasted at least five (5) years.

The cause of death includes gifts made during the lifetime or cause of death and parental benefits of the deceased to the heir, provided that the tax liability for these arose at a time when the public’s right has not expired, i.e. gifts made between 01.01.2009 and 30.09.2021 (except for monetary parental benefits and gifts that were taxed separately). For the purposes of taking these acquisitions into account, the value that was subject to tax at the time the tax liability arose is taken into account, and not the exempt amounts.

 

Finally, in the Inheritance Tax Return, all heirs declare except for the assets of the estate and all of its liabilities, which include the certain and settled debts of the deceased that legally exist on the date of death.

 

Inheritance tax exemptions

The following, among others, are exempt from inheritance tax:

 

• Movable property located abroad belonging to a Greek citizen who has been resident there for at least ten (10) consecutive years.

 

• Cash deposits in a bank in euros or foreign currency in the name of two or more joint beneficiaries, as well as joint accounts of other financial products in Greece or abroad, regardless of the residence of the joint beneficiaries, after the death of any of them for all surviving joint beneficiaries, to whom it automatically passes, and until the last of them. The only condition for exemption from inheritance tax is that the banking contract must expressly state the additional condition that upon the death of any beneficiary, the deposit and the account shall automatically pass to the other survivors until the last of them. This exemption does not apply to cash deposits and accounts held in non-cooperative countries in the field of taxation and in countries that have not concluded and implemented an administrative assistance agreement with Greece in the field of taxation or have not signed and implemented the Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information ratified by Law 4428/2016.

 

Foreign tax credit

From the tax arising on the total value of the inherited property, the tax that has been proven to have been paid in one or more foreign countries for the movable property located therein shall be deducted up to the amount of tax corresponding to the property located in each foreign country. For the purposes of the deduction, the tax paid or certified abroad is considered to be that which is levied on property taxed in Greece and paid or certified in favour of the foreign state or, in the case of a federal state, also the tax in favour of the federal states or states.

In order to determine the amount to be deducted, the tax arising on the total value of the inherited property is apportioned between the parts located in Greece and in each foreign country. The tax due may not be less than the tax corresponding to the assets located in Greece, without taking into account the foreign assets taxed in Greece.

The application for a refund of tax paid or certified abroad, with a relevant certificate from the foreign tax authority, shall be submitted within five (5) years of the final settlement of that tax.

 

Example:

O K, a Greek citizen, died in Greece in 2025 and left his adult child A as his sole heir by virtue of intestate succession. How will inheritance tax be calculated in Greece for the following assets:

Assets:

• Real estate in Greece with a total value of €700,000.
• Real estate in the USA with a total value of €2,000,000.
• Financial products in Greece with a total value of €500,000.
• Financial products in the United States with a total value of €800,000.
• Joint account with a total value of €2,000,000

 

Previous parental gift:

In 2022, K made a parental gift of real estate to his child A, worth €200,000.

 

Answer:

With regard to the real estate in the United States with a total value of €2,000,000, it will not be taxed in Greece in accordance with Article 3 of the Code and Article 3(2) of the Double Taxation Agreement between Greece and the United States.

Furthermore, the parental gift of real estate, provided it took place in 2022, will not be taken into account for the calculation of inheritance tax.

The joint account is exempt from inheritance tax, but will be declared in the inheritance tax return as an exempt amount.

The other assets with a total value of 2,000,000 will be taxed as follows:

Value of inherited property	Tax rate (%)	Tax bracket (€)
150,000	–	–
150,000	1	1,500
300,000	5	15,000
1,400,000	10	140,000
Total inheritance tax	140,000

 

It should be noted that the tax that was demonstrably paid in the United States for the movable property located there is deducted from the above tax calculated on the total value of the inherited property.

 

 

* The information is accurate to the best of our knowledge as at the time of writing. We have no obligation to update it. We accept no responsibility against any third party who is not a client of the firm and has not signed the terms of our engagement.