What does “internationalisation of assets” mean in concrete terms?

Many Luxembourg residents were not born in Luxembourg or are of foreign nationality, and often have assets in their country of origin or in a foreign country in addition to assets in Luxembourg. Their children may also have left home to live and work in another country. The result is a family estate that is spread over different jurisdictions, with the heirs sometimes far away.

How does this complicate the transfer of assets?

As you can imagine, in the case of an inheritance, the legal provisions considered are those of the countries where assets are located as well as those of the countries of residence of the heirs and the deceased. From a legal point of view, the inheritance process can be complex, especially in the absence of a comprehensive overview of the geographical scope of the assets. From a tax point of view, cases of double taxation may arise.

What should be taken into account?

In the case of inheritance, two main aspects must be considered: the civil aspect and the tax aspect.

The civil aspect addresses the issue of who inherits what. While each country used to have its own legislative criteria, the 2015 EU Succession Regulation has allowed for harmonisation on this point. In principle, the applicable law is that of the last country of residence of the deceased with the possibility of explicitly opting for the applicable law of the nationality of the deceased.

But what about the tax aspect?

The tax aspect addresses the question of inheritance tax. Here, no harmonisation between the different countries exists meaning the assets concerned could be taxed in several countries. In the case of a Luxembourg resident, the transfer of all the assets in the estate, except for real estate located abroad, will be taxed. For a non-Luxembourg resident, only Luxembourg property held directly will be subject to Luxembourg inheritance tax.

What about the heirs?

It is also important to take into account where the heirs are located as they may also be liable for inheritance tax in their country of residence. For example, in France, the portion of the estate that could be subject to French inheritance tax will depend on how long an heir has been resident in France at the time of the inheritance.

Beyond these economic and legal dimensions, what else should we be aware of?

Inheritance is not a simple subject to tackle, whether for both legatees and heirs. I believe that the key to a successful international transfer of wealth involves both forward planning and communication between family members and the estate planner. 

Is this what you recommend to your clients?

Absolutely, I'm thinking I particular of one of our clients, Inès, whose children live abroad. She wanted to take stock of her assets and protect them so she can pass them on to her children.

What services does the Bank offer in this respect?

Some of our clients have been with Degroof Petercam for a very long time. Our teams that are specially dedicated to estate planning are able to follow these family estates generation after generation and ensure they are properly passed on.

For more information, please contact Florence Waûters by email: