Do I have to pay inheritance tax in Liechtenstein?
No — Liechtenstein has levied no inheritance, estate or gift tax since 2011. Anyone who thinks a Liechtenstein inheritance attracts inheritance tax in the country is mistaken: the new Tax Act (SteG, LR 640.0) abolished these taxes entirely on 1 January 2011. An inheritance or gift can therefore be passed on tax-free within the country — regardless of the degree of kinship. That is the core difference from Switzerland, where the cantons still tax inheritances and usually only the spouse and children are exempt. Yet three things remain: assets flowing into a foundation or a special asset dedication can trigger a dedication tax (Widmungssteuer); inherited assets increase your wealth tax going forward; and anyone with tax ties abroad (for instance Germany or Austria) can be assessed for inheritance tax there — the Liechtenstein abolition does not protect against that.
📋 The rules
- Abolished since 1 Jan 2011: The Tax Act (SteG, LR 640.0) fully abolished the inheritance, estate and gift tax. For deaths and gifts from that date, no such tax arises within the country.
- Regardless of kinship: Whether spouse, child, nephew or unrelated person — within the country there is no inheritance tax and no allowance brackets any more, because the tax as such has gone.
- Dedication tax as replacement: For gratuitous transfers to foundations and special asset dedications, a dedication tax took the place of the old gift tax — it concerns asset transfers to legal entities, not the ordinary family inheritance.
- Wealth tax continues: Inherited assets fall under your wealth and income tax from the moment of inheritance — the transfer is tax-free, the holding afterwards is not.
- Probate remains: The estate is settled by the court (probate at the Court of Justice); this can involve court and commission fees — that is not a tax, but it is effort.
🔓 Exceptions
- Foundations and asset dedications: Here the dedication tax applies — anyone dedicating assets to a foundation should clarify the consequences in advance with the Tax Administration.
- Foreign connection: If the deceased or the heir has residence, nationality or assets abroad, the law there (e.g. German or Austrian inheritance tax) can still apply.
- Property with latent tax: If an inherited property is later sold, no inheritance tax arises, but the real estate gains tax does — calculated from the original acquisition cost of the deceased.
⚠️ Penalties & fines
There is no inheritance tax, so no tax penalty for it — the costs lie elsewhere. The first item is probate: the estate is settled at the Court of Justice, which can involve court, curator and valuation costs. The second is wealth tax: whoever conceals the inheritance in the tax return risks back tax, default interest and a tax-evasion penalty — not for the inheritance, but for the undeclared assets. The third is the latent real estate gains tax: on a later sale of an inherited property, the gain is taxed from the old acquisition cost, not from the value at inheritance. And the most expensive misconception is the foreign case: whoever assumes the Liechtenstein tax freedom also applies towards Germany or Austria can trigger a full inheritance tax plus late-payment surcharges there.
📎 Official sources
- Gesetze.li · Tax Act (SteG, LR 640.0) — consolidated version →
- National Administration · Tax Administration, natural persons (home) →
- National Administration · Office of Justice, probate (home) →
❓ Frequently asked
Do I pay tax on an inheritance in Liechtenstein?
No, since 1 January 2011 there has been no inheritance, estate or gift tax (SteG, LR 640.0). An inheritance passes on tax-free within the country, regardless of whether you are related to the deceased or not.
And gifts during my lifetime?
The gift tax was also abolished in 2011, so private gifts within the country are tax-free. An exception applies to transfers to foundations and special asset dedications, for which a dedication tax applies.
Is it like in Switzerland?
No — Switzerland taxes inheritances at cantonal level, where usually only spouses and children are exempt. Liechtenstein, by contrast, has abolished inheritance tax entirely, which makes a big difference especially for more distant heirs.
Do I still have to declare the inheritance?
Yes, in the tax return, because inherited assets fall under your wealth tax from the moment of inheritance. If you conceal them, back tax and a tax-evasion procedure loom — not for inheriting, but for the undeclared assets.
Is anything due when I sell an inherited property?
No inheritance tax, but the real estate gains tax on a later sale. The taxable gain is then calculated from the original acquisition cost of the deceased, so a latent tax burden is inherited along with the property.
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