Inheritance Tax in Malta: What You Should Know

Inheritance laws vary greatly across the world, and Malta is no exception. If you’re dealing with estate matters in this Mediterranean island nation, in this article, we’ll show how inheritance works here.

Here’s what you should know:

No Inheritance Tax in Malta

One of the most notable aspects of Malta’s inheritance framework is the absence of an inheritance tax. Unlike many other countries that impose taxes on the transfer of wealth upon death, Malta does not levy an estate tax, succession tax, or inheritance tax.

This makes the process of inheriting assets less financially burdensome for beneficiaries. However, there are other potential costs and obligations associated with inheritance in Malta.

Duty on Documents and Transfers

Although there is no inheritance tax, Malta does impose a duty on documents and transfers. This duty applies to certain types of assets, such as:

• Immovable property located in Malta
• Shares in Maltese companies

The rate of this duty varies depending on the specific circumstances but is typically calculated as a percentage of the total value of the estate. For further assistance in this matter, feel free to consult with our experts in Malta to see how this might apply to your situation.

Inheriting Immovable Property in Malta

When it comes to immovable property, Maltese inheritance law can trigger specific requirements. For example, heirs may need to pay a duty on the transfer of property to their name.

Additionally, the process of transferring property involves registering the change of ownership with the relevant authorities. This ensures that the property is legally recognized as belonging to the new owner.

Maltese Succession Law: Intestate and Testate Scenarios

Inheritance in Malta is governed by the Maltese Civil Code, which outlines how estates are distributed depending on whether the deceased left a will (testate) or not (intestate).

1. Testate Succession

If the deceased left a valid will, their assets are distributed according to their wishes, as outlined in the will. Maltese law generally respects the wishes of the testator, provided the will complies with legal requirements.

2. Intestate Succession

If there is no will, the estate is distributed according to Maltese intestate succession laws. These laws prioritize close relatives, such as:

• Spouse
• Children
• Parents
• Siblings

The specific division depends on the circumstances of the surviving relatives. For example, if the deceased leaves behind a spouse and children, the estate is divided among them. If no immediate family members are available, the inheritance may pass to more distant relatives or, in rare cases, to the state.

Inheriting Assets from Abroad

For individuals inheriting assets located in Malta but residing abroad, it’s important to navigate potential cross-border implications. While Malta’s inheritance framework is straightforward, foreign jurisdictions may impose taxes or reporting obligations on inherited assets.

Legal and Administrative Steps

Handling inheritance in Malta involves several administrative steps, which may include:

1. Obtaining a death certificate for the deceased.
2. Identifying the rightful heirs and their respective shares.
3. Registering the transfer of ownership for immovable property and other assets.
4. Paying any applicable duties or fees.

It’s worth noting that the process can become complex, especially when multiple heirs are involved or when the estate includes international assets.

Practical Considerations for Expats and Non-Residents

Malta’s appeal as a destination for expatriates means that many non-Maltese individuals own assets on the island. For these individuals, planning ahead is crucial. Creating a will that clearly outlines how their Maltese assets should be distributed can prevent complications for their heirs. Additionally, understanding how local laws interact with the laws of their home country can help mitigate legal and tax challenges.

Why Professional Advice Matters

While Malta’s lack of an inheritance tax may simplify estate matters, navigating the duty on documents, property transfers, and cross-border complexities requires careful attention.

Consulting with a Maltese lawyer or tax advisor can provide clarity on:

• Drafting or interpreting wills
• Calculating duties and fees
• Ensuring compliance with local laws

Final Thoughts

Inheritance in Malta comes with several advantages, including the absence of an inheritance tax. However, the legal and administrative processes involved in transferring assets require a thorough understanding of Maltese law. So whether you’re a local resident or a foreign national, we suggest planning ahead and, if necessary, seeking professional guidance to make the process simpler for everyone involved.

Sources

Maltese Civil Code

Inheritance tax in Malta