Dozens of countries impose no inheritance or estate tax, and the list of countries with no inheritance tax includes major economies like Canada, Australia, New Zealand, Singapore, Hong Kong, Sweden, Norway, Austria, and most Gulf states. The list is longer than most people expect. But the absence of a death tax in the country where you live rarely tells the whole story. If you are a US citizen, the IRS taxes your worldwide estate wherever you live. If you are a long-term UK resident, Inheritance Tax follows you for years after you leave. And many “zero-tax” countries quietly replace the inheritance tax with capital gains taxes at death that can produce a similar bill.
Which Countries Have No Inheritance or Estate Tax
A surprisingly large number of countries impose no tax on inherited wealth at the national level. Several are wealthy, developed nations that made a deliberate policy choice to eliminate the tax.1PWC Tax Summaries. Inheritance and Gift Tax Rates
- North America and Oceania: Canada, Australia, New Zealand, and Mexico.
- Europe: Sweden (repealed 2005), Norway (repealed 2014), Austria, Estonia, Latvia, and Slovakia.
- Asia-Pacific: Hong Kong (repealed 2006), Singapore (repealed 2008), China, India, and Malaysia.
- Other: Israel, Russia, and most Gulf states.
Some countries on this list deserve an asterisk. Portugal formally abolished its inheritance tax in 2004, but it still imposes a 10% stamp duty on inherited assets received by anyone outside the direct family line. Spouses, children, and grandparents pay nothing; siblings, unmarried partners, and friends face the full 10% charge. Switzerland does not levy a national inheritance tax, but most cantons impose their own, particularly on bequests to non-direct descendants. When a country is described as having “no inheritance tax,” it is always worth asking what it replaced.
Capital Gains and Transfer Taxes That Replace Inheritance Tax
Many zero-tax countries collect revenue at death through a different mechanism: taxing the unrealized capital gains that built up during the deceased person’s lifetime. The economic result can be similar to an inheritance tax, just under a different label.
Canada’s Deemed Disposition
Canada treats a deceased person as having sold all their property at fair market value immediately before death. This “deemed disposition” triggers capital gains tax on every dollar of appreciation, even though nothing was actually sold.2Canada.ca. Prepare Tax Returns for Someone Who Died – Report Income, Transfers, and Dispositions The tax lands on the deceased’s final return. As of January 1, 2026, Canada’s capital gains inclusion rate is one-half for the first $250,000 in annual gains for individuals, and two-thirds for gains above that threshold.3Canada.ca. Government of Canada Announces Deferral in Implementation of Change to Capital Gains Inclusion Rate For an estate with significant appreciation in real estate or investments, the combined federal and provincial bill can exceed 25% of the gain.
Transfers to a surviving spouse or common-law partner are the exception. Those pass on a tax-deferred basis, pushing the deemed disposition to whenever the surviving spouse dies or sells.
Australia’s Inherited Cost Base
Australia takes a different approach. No capital gains tax applies at the moment of death, and assets pass to beneficiaries tax-free at that point.4Australian Taxation Office. How CGT Applies to Inherited Assets The catch is that beneficiaries inherit the deceased’s original cost base for assets acquired on or after September 20, 1985. When the beneficiary eventually sells, they owe capital gains tax on the entire appreciation from the deceased’s original purchase date, not from the date they inherited.5Australian Taxation Office. Cost Base of Inherited Assets For assets the deceased acquired before September 20, 1985, the cost base resets to market value at the date of death, which is actually more favorable.
Compare this to the US, where inherited assets receive a stepped-up basis equal to fair market value at death, effectively wiping out all unrealized gains for heirs. Australia preserves the liability and simply delays collection. An heir who sells a property their parent bought 30 years ago pays tax on three decades of appreciation.
Why Moving Abroad Does Not Eliminate US Estate Tax
This is where most planning goes wrong. A US citizen is subject to federal estate tax on worldwide assets no matter where they live. Moving to Singapore or New Zealand does not change this. Citizenship-based taxation means the IRS follows you everywhere until you formally renounce.6Internal Revenue Service. Estate Tax
For non-citizens, the relevant concept is domicile, not residency. You can be a resident of multiple countries, but you can only have one domicile for tax purposes. The IRS considers a non-citizen domiciled in the US if they reside here with no definite present intention of leaving. Once domiciled, the full estate tax applies to worldwide assets, just as it does for citizens.
Shedding a US domicile requires more than buying a house overseas. The IRS looks at the totality of your ties: where you vote, where your bank accounts and investments are held, where you maintain driver’s licenses and professional memberships, and where your closest personal relationships are. Keeping a US voter registration while claiming foreign domicile is the kind of inconsistency that loses cases.
Formally giving up citizenship does not provide a clean exit either. “Covered expatriates,” broadly those with a net worth of $2 million or more, high recent US tax liability, or an inability to certify five years of tax compliance, face a mark-to-market exit tax under Section 877A that treats all worldwide assets as sold at fair market value the day before expatriation.7Office of the Law Revision Counsel. 26 US Code 877A – Tax Responsibilities of Expatriation An exclusion of $890,000 applied in 2025, with the 2026 figure adjusted for inflation.8Internal Revenue Service. Expatriation Tax
The UK’s Long-Term Resident Trap
The United Kingdom replaced its old “deemed domicile” rules in April 2025 with a long-term resident test that is simpler but harder to escape.9GOV.UK. Deemed Domicile Rules Under the new system, you become subject to UK Inheritance Tax on your worldwide assets if you have been tax resident in the UK for 10 consecutive years, or for 10 or more years out of the previous 20.10GOV.UK. Inheritance Tax if You’re a Long-Term UK Resident
Leaving does not immediately end exposure. A “tail” period keeps you within scope for up to 10 additional tax years after departure, depending on how long you were resident. Someone who lived in the UK for 15 years retains long-term resident status for 5 years after leaving. Anyone who lived there for 20 or more years remains in scope for a full decade after departure.10GOV.UK. Inheritance Tax if You’re a Long-Term UK Resident For people who spent their working career in London and retired to a zero-tax jurisdiction, the tail provision means the UK’s 40% Inheritance Tax follows them well into retirement.
Non-Residents Who Own US Assets
Foreign nationals who never lived in the US can still owe federal estate tax if they own US-situated assets. The filing threshold is just $60,000, a fraction of the $15 million exemption available to citizens and domiciliaries.11Internal Revenue Service. Some Nonresidents With US Assets Must File Estate Tax Returns US-situated assets include real estate located in the US, tangible personal property physically present here, and stock in US-incorporated companies, even if the share certificates are held abroad.
This catches foreign nationals who own US rental property, hold individual US stocks, or have interests in US-based businesses. The top 40% estate tax rate applies, and the only credit available without a treaty is a modest unified credit equivalent to the $60,000 exemption.12Internal Revenue Service. Frequently Asked Questions on Estate Taxes for Nonresidents Not Citizens of the United States
The US maintains bilateral estate or gift tax treaties with 15 countries, and these can increase the effective exemption, often by granting a pro-rata share of the full US exemption based on the ratio of US assets to worldwide assets.13Internal Revenue Service. Estate and Gift Tax Treaties (International) Notable absences matter. Singapore, Hong Kong, and most of Latin America have no estate tax treaty with the US. A Singaporean national who dies owning US real estate faces the $60,000 threshold and the 40% rate with no treaty relief.
Receiving an Inheritance From a Zero-Tax Country as a US Person
Receiving an inheritance from a foreign estate does not automatically trigger US income tax, but it does trigger a reporting obligation that carries severe penalties if ignored. A US person who receives more than $100,000 in a year from a non-resident alien or foreign estate must report it on Form 3520.14Internal Revenue Service. Instructions for Form 3520 This is an information return, not a tax payment, but the IRS treats it seriously.
The penalty for failing to file Form 3520 on time, or for filing with incomplete or incorrect information, starts at the greater of $10,000 or 35% of the reportable amount. If you still haven’t filed 90 days after the IRS sends a notice, an additional $10,000 penalty accrues for every 30-day period of continued noncompliance, up to the full value of the inheritance.15Internal Revenue Service. Failure to File the Form 3520/3520-A Penalties On a $1 million foreign inheritance, the initial penalty alone would be $350,000. These penalties are among the harshest in the entire tax code relative to the amount involved, and they apply even when no tax is owed on the inheritance itself.
The $100,000 threshold is aggregated across gifts and bequests from related foreign persons. If you receive $60,000 from a foreign estate and $50,000 from a relative of the deceased in the same year, you have crossed the threshold. Form 3520 is due with your income tax return, including extensions.
Don’t Forget State Death Taxes
A “no inheritance tax country” strategy also needs to account for where you live inside the US. Twelve states and the District of Columbia impose their own estate taxes, with exemption thresholds far lower than the federal $15 million. Oregon and Massachusetts have the lowest thresholds at $1 million and $2 million. Washington state exempts the first $2,193,000, while Connecticut matches the federal exemption at $13,610,000. Five states impose inheritance taxes: Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania.16Tax Foundation. Estate and Inheritance Taxes by State, 2025 Iowa eliminated its inheritance tax effective January 1, 2025. Maryland is the only state that imposes both.
For families in states with low thresholds, state-level death taxes can apply to estates well below the federal filing requirement. Moving to a state with no death tax before the end of life is a common planning move, but establishing genuine domicile in the new state requires the same thorough tie-cutting that applies internationally.