Inheritance tax can be a significant expense for many individuals, especially if the inheritance includes immovable property that cannot be sold. A survey conducted by the insurance company Lähi-Tapiola revealed that half of Finns have either received or anticipated receiving an inheritance that requires payment of inheritance tax. This tax must be paid on inheritances worth 20,000 euros or more, and many individuals struggle to cover these costs without external funding.
The most common ways to cover inheritance tax expenses are using the estate’s savings or the heir’s own savings. Selling estate property is another common strategy, as is selling the heir’s own property. However, more than 10 percent of respondents admitted to not preparing for the future costs of inheritance tax at all.
Unpaid inheritance taxes in Finland are also becoming a growing concern, with almost eight million euros subject to enforcement actions last year. The number of people paying inheritance tax has also increased, with over 100,000 individuals paying an average of 10,000 euros each. Interest on unpaid taxes is also a concern, as the rate has increased to 7.5 percent.
In some cases, individuals may need to take out loans or sell property to cover these expenses. Planning for inheritance taxes and seeking financial guidance can help individuals navigate these complex financial responsibilities. While the inheritance tax payment period has been extended to ten years, it is still important to address these tax obligations promptly to avoid accruing additional interest.
The survey results also highlighted that nearly one in ten respondents who received or will receive an inheritance had to take out a loan to pay for the inheritance tax. Some individuals have had to resort to selling their own property to cover these expenses. In situations where the inheritance consists of immovable property that cannot be sold, the heirs may face even greater challenges.
Overall, it is essential for individuals planning their finances and estate planning strategies