Cross country review of taxes on wealth and transfers of wealth : revised final report, EY - October 2014

This study compares three different categories of taxes on wealth and the transfer of wealth: - Inheritance and gift; - Real estate and land; - Net-wealth. Inheritances are taxed in 20 Member States and gifts in 21. One of the main characteristics of both inheritance and gift taxes is the principle of care between generations whereby the spouse or children are largely exempt from tax. Thus although the tax base is broad and rates can be high, the revenues from inheritance and gift taxes are relatively low. Real estate is taxed in every Member State. Most Member States tax both the possession and the transfer of real estate. Tax rates are on the whole relatively low but there are normally very few exemptions. The main issue with real estate taxes, especially those on the possession of real estate, is the issue of the value for tax purposes. Taxes on net-wealth are rare. Though several countries have (environmental) taxes on the possession of certain assets, only three Member States use net-wealth as a tax base. Taxes on net-wealth are characterized by a relatively large tax free threshold. Thus only a small proportion of the theoretical number of taxpayers is liable to net-wealth tax. This results in a relatively low revenue yield.