Finland: Changes in Inheritance and Gift Tax Regulations in Finland
During the year 2017 there will be several new tax amendments in Finland of which this article addresses and introduces the key aspects of the new inheritance and gift taxation.
The recent government Bill 29/2016 included amendments to the Inheritance and Gift Tax Act. The amendments have been effective since January 1.1.2017.
First of all, it is worth nothing that inheritance and gift taxation has been deducted in all cycles due to the decrease in the tax percentage rates in all scales. Consequently, the government pointed out that the lowering of scales was vital in order to make change of generations swifter. Deductions were particularly intended to improve generation changes in corporations and farm sites.
Second of all, in gift tax, amendments meant that the lowest amount which is subject for tax was raised from 4000 euros to 5000 euros. Other deductions were executed by lowering the tax percentages as well as lowering or removing the tax scale steps. Therefore, the tax rates in the first cycle (natural heir) were lowered down in gift taxation from 20 % to 17%, and inheritance tax to 19%.
There have been concerns that the lowering of the tax rates will benefit the wealthy, as the tax deductions mainly focused on the first cycle and on the top-end of the gift tax chart.
Finally, insurance coverages tax-free period, which is paid in case of death, will be removed in 2018 after one year transfer period has elapsed.
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