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Does China Have Inheritance Tax? - CFM 101 Series

No.

China has not yet imposed any inheritance tax, which means that heirs in China do not have to pay taxes on the property they inherit.

However, deed tax shall be paid for inheritance of immovable property by an inheritor who is not an intestate successor.

In addition, if the heir inherits the estate and then sells the estate, he/she will be subject to personal income tax.

1. Inheritance tax: N/A

At present, China has neither imposed inheritance tax, nor issued regulations or draft regulations related thereto.

This is the official statement of China’s Ministry of Finance in 2017.

2. Fee for inheritance right notarization: 0.5 ~ 2% of the estate

If you want to inherit the deposit in the decedent’s bank account or the house of the decedent, you need to prove to the bank or the house registration authority that you have the right to inherit.

In China, this requires you to obtain a notarial certificate issued by a notary office to prove your inheritance right.

If you intend to use the notarial certificate to prove that you have the right to inherit an estate, then you have to pay the notary office a notarization fee according to a certain proportion of the market price of the estate.

The prices charged by notary offices vary from each other in China.

Generally, this proportion ranges from 0.5 to 2%.

3. Deed tax: 1 ~ 5% of the house price

If you want to inherit the decedent’s house, you need to pay deed tax.

Specifically:

(1) If you are the legal heir of the decedent, you are not required to pay deed tax.

For example, if you are the children, spouse, parents, siblings, grandparents of the decedent, you do not need to pay deed tax.

(2) Otherwise, you need to pay deed tax.

The deed tax rate ranges from 1 to 5% (i.e., 1 ~ 5% of the house price) as the case may be.

4. House evaluation fee: within 0.5% of the house price

If you need to pay deed tax, then you need to prove the house price to determine the taxation base thereof.

At this time, you need to hire a professional agency to evaluate the house at a price usually within 0.5% of the house price.

5. Income tax in the future: 20%

Although you don’t need to pay inheritance tax at inheritance, you need to pay income tax if you sell the estate in the future.

At this time, your income will be the sale income of the estate minus the expenses paid by you at inheritance (such as deed tax).

You need to pay 20% personal income tax for this income.

Of course, this income tax is only payable when you sell the estate in the future.

Therefore, you do not have to pay income tax at inheritance.

 

 

 

The Cross-border Family Matters 101 Series (‘CFM 101 Series’) provides an introduction to China-related cross-border family matters (marriage and succession), and covers the knowledge essential to cross-border family matter management.

 

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Cover Photo by millerthachiller (https://unsplash.com/@millerthachiller) on Unsplash

 

Contributors: CJO Staff Contributors Team

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