Inheritance Law and Bilateral Tax Treaties for Expats

For expatriates with families across different countries, understanding the complexities of inheritance law and how it intertwines with bilateral tax treaties has never been more important. As global mobility continues to rise, expats are increasingly finding themselves needing to navigate these intricate legal frameworks. Whether you have assets in multiple jurisdictions or family members scattered across borders, here’s what you need to know about inheritance law and bilateral tax treaties in 2025.

Inheritance Law: A Patchwork of National Regulations

Inheritance laws differ dramatically from country to country. As an expat, your assets may be subject to different rules depending on where they are located. For example, some countries follow forced heirship laws, which stipulate that a portion of your estate must be passed to certain family members, regardless of your personal wishes. Meanwhile, in countries like the United States or the United Kingdom, wills and estates are governed by more flexible, discretionary inheritance laws.

When you pass away, the jurisdiction governing your assets is typically determined by where those assets are situated. This means that if you own real estate in one country and financial accounts in another, each country’s inheritance law may apply to those specific assets. However, there’s an important exception to keep in mind: bilateral tax treaties.

Bilateral Tax Treaties: Reducing the Risk of Double Taxation

Bilateral tax treaties are agreements between two countries designed to prevent double taxation on income, estate, and inheritance. These treaties help clarify which country has taxing rights over an expat’s estate when they pass away, reducing the risk of your estate being taxed by both your home country and the country where you live (or where your assets are located).

For expats with families in other countries, these treaties can provide a lifeline in managing the financial burdens that may arise after death. Instead of having to navigate two separate tax regimes, bilateral tax treaties typically allocate taxing rights based on factors like domicile, nationality, or location of the assets.

Here’s how bilateral tax treaties can work for you:

1. Avoidance of Double Inheritance Taxation: If you're an expat living in one country with assets in another, a tax treaty may allow for an exemption or tax reduction on inheritance taxes. This ensures that your heirs are not faced with having to pay inheritance taxes in both the country where you live and the country where your assets are located.

2. Clear Rules on Domicile and Residency: Many tax treaties specify which country will claim jurisdiction over your estate based on where you are considered domiciled or a tax resident. This can simplify the legal process for your family after you pass away, as they’ll know which country’s inheritance laws apply.

3. Reduced Administrative Costs: By preventing multiple tax authorities from claiming inheritance tax over the same assets, bilateral treaties can reduce administrative hurdles for your heirs. This saves time and money, ensuring that your loved ones aren’t burdened by complicated cross-border legal battles.

Important Considerations for Expats

As global tax laws evolve every year, several important factors should influence your estate planning strategy:

1. Digital Assets: In an increasingly digital world, many expats hold a substantial portion of their wealth in digital assets, such as cryptocurrencies, digital real estate, or online business interests. These assets are often treated differently from traditional property in terms of inheritance. It's essential to understand how your chosen jurisdiction handles digital assets under inheritance law and how tax treaties may apply to them.

2. Brexit and EU Tax Law Changes: For expats living in the EU or UK, the post-Brexit landscape has brought changes to how bilateral tax treaties function, particularly with respect to inheritance tax. The UK is no longer a part of the EU framework, and some treaties that were in place before Brexit have been renegotiated. If you’re a British citizen living in an EU country (or vice versa), be sure to review the latest bilateral agreements between your home country and host country.

3. Wealth Taxes: Some countries levy wealth taxes that apply to your total assets, including property and investments. Be mindful of how these taxes are affected by inheritance laws and bilateral tax treaties, as they may impact your heirs’ financial future.

4. Increased Scrutiny on Tax Evasion: Governments worldwide have been cracking down on tax evasion, and this includes how inheritances are reported. With stricter reporting requirements for cross-border estates, it’s crucial to work with a legal professional who is familiar with both inheritance laws and international tax treaties. This ensures your estate planning is both compliant and optimized.

5. Cross-Border Will and Trust Structures: Consider establishing a multinational will or trust to govern your estate according to your wishes, especially if you own significant assets in multiple countries. This can help streamline the process of transferring assets to your heirs, regardless of where they live. Bilateral tax treaties may help ensure that these structures minimize the impact of estate taxes in multiple jurisdictions.

The Role of Estate Planning Professionals

Given the complexity of inheritance laws and tax treaties, having the right team of professionals is essential. Apply to become a client today to work with our experts on legal tax strategies in cross-border inheritance issues. We can help tailor your estate plan to ensure your wishes are respected, minimize tax liabilities, and provide your family with a smooth transition.

Protecting Your Family’s Future

As an expat with family members in different countries, the intersection of inheritance law and bilateral tax treaties is crucial to safeguarding your wealth and ensuring a secure future for your loved ones. By staying informed about the latest changes in inheritance law and taking full advantage of bilateral tax treaties, you can mitigate the impact of inheritance taxes and ensure your estate is managed according to your wishes. In 2025, proactive and thoughtful estate planning can make all the difference in securing peace of mind for both you and your family across borders.

Indotco International

Inheritance Law and Bilateral Tax Treaties for Expats