Inheritance Tax

Both permanent and non-permanent residents of the Republic of Lithuania who have inherited property must pay inheritance tax. A citizen is treated as a permanent resident of Lithuania if he/she meets the criteria established in the Republic of Lithuania Law on Income Tax of Individuals (e. g., his/her permanent place of residence is in Lithuania, his/her personal, social or economic interests are located in Lithuania, he/she stays in Lithuania for a certain period etc.).

Inherited property (any movable or immovable objects, securities, cash) is the tax object in the case of a permanent resident of Lithuania.

Inherited movable property is the tax object in the case of a non-permanent resident of the Republic of Lithuania, provided that the object is subject to legal registration under Lithuanian law and has been (or must be) registered in Lithuania. Non-permanent residents must also pay inheritance tax on immovable property located in Lithuania.

The tax base consists of the taxable value of the inherited property, which is calculated in accordance with the Rules Governing the Calculation of Taxable Value of Inherited Property.

The tax amount is calculated as a percentage of the taxable value of inherited property at the following rates:

1. 5% — where taxable value of inherited property does not exceed EUR 150,000;
2. 10% — where taxable value of inherited property exceeds EUR 150,000.

Tax exemptions:

1. in case of death of a spouse — property inherited by surviving spouse irrespective of the value of property;
2. property inherited by children (adopted children), parents (adopted parents), guardians (carers), persons under guardianship (care), grandparents, grandchildren, brothers and sisters irrespective of the value of property;
3. in case of inheritance by persons not mentioned in the sub-paragraphs above — a percentage of the taxable value of the property not exceeding EUR 3,000.

Furthermore, municipal councils may reduce the inheritance tax rate, grant full exemption at the expense of its own budget or postpone the time limit for payment for a period of up to one year after the issue of the certificate of inheritance right.

A resident must pay the tax prior to the issue of the certificate of inheritance right except for cases where the municipal council has postponed the payment time limit or has granted exemption. If a permanent resident of Lithuania inherits property in a foreign state, he/she must submit a tax return and pay the tax by 1 March of the following calendar year in which the inheritance took place.

Tax amounts are calculated by persons responsible for the issue of certificates of inheritance right, i. e. notaries — based on details of valuation of inherited property submitted to them and other documents required for the formalisation of the title and justification of tax reliefs.

The Inheritance Tax Law was adopted on 10 December 2002 and came into effect on 1 January 2003. This law replaced the Republic of Lithuania Law on Taxation of Inherited or Donated Property which had been in effect since 1996. A comment on the Law has been published on the website of the State Tax Inspectorate.