Branches of law

Inheritance taxation

According to the Tax Code of Ukraine, the objects of inheritance are subject to taxation at different rates, depending on the kinship degree of the testator and the heirs.

Thus, the objects of inheritance that are inherited by the testator’s family members of the first and second degree (children, spouses, parents; siblings of the testator, grandparents) are taxed at the zero rate of personal income tax (paragraph 174.2.1 “a”, clause 174.2, Article 174 of the Tax Code).

The value of any inheritance object of the heirs who are not members of the testator’s family of the first and second degree is taxed at the rate of 5% of the estimated value (paragraph 174.2.2, clause 174.2, Article 174 of the Tax Code).

So, resident individuals who receive an inheritance from a resident individual, but who are not family members of the first and second degree, pay income tax at the rate of 5% of the value of any inheritance.

Objects of inheritance that are inherited by an heir from a non-resident testator, and objects of inheritance that are inherited by a non-resident heir from a resident testator, are subject to personal income tax at the rate of 18%.

Individuals who have inherited objects that are taxed at the zero rate of personal income tax do not submit a declaration to the tax service if there are no other grounds for submitting an annual tax declaration on the property status and income of citizens.

Individuals who have received an inheritance taxed at the rate of 5% and 18% are required to submit a tax return to the supervisory authority at the taxation address, that is, at the place of registration, based on the results of the reporting tax year no later than April 30 of the year following the year in which the inheritance was received. The declaration must include the annual taxable income and determine the tax liabilities for personal income tax and military collection (the rate of 1.5%).

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