International inheritance
When a person passes away, estate or inheritance taxes may apply. For larger estates, estate tax may also be due.
If the deceased was a resident of Denmark, taxes and duties are paid under Danish law before the heirs—whether Danish or foreign—receive their inheritance.
Domestic planning opportunities
Within Danish tax law, inheritance can often be optimized through careful estate planning
Cross-border inheritance
International inheritance situations are far more complex. Generally, the deceased’s estate is taxed in the country of residence. For example, an estate of a Danish resident is taxed according to Danish rules before distribution. However, the subsequent taxation of each heir depends on their residence and the type of assets inherited.
Types of international estate planning
- Shares and investments: If an heir lives in a country with low taxation of capital gains, it may be beneficial to allocate shares at minimal value to that person.
- Real estate: If an heir faces high taxes on property, selling the asset at market value and transferring the proceeds as cash inheritance may be optimal.
- Complex assets: Inheritances from abroad—such as trusts, brokerages, LLCs, or other foreign structures—can have widely varying tax consequences in Denmark. Depending on how the foreign asset is classified, Danish inheritance tax can range from 0% up to 52%. This is especially relevant for assets originating from jurisdictions with different legal or tax systems, whether from remote islands in the Pacific or more mainstream locations like the USA or UK, where trusts and LLCs are common estate planning tools.
- Trusts: Gives significant challenges in the Danish tax system leading to between 0% and 52% taxation. The Danish qualification of the individual trust is crucial.
Contact us
We provide guidance on international inheritance matters, helping you navigate cross-border taxation and optimize estate outcomes.