Succession within the EU – general information

Residence before nationality

The nationality of the deceased is of no importance when it comes to succession. The European Succession Regulation governs cross-border succession. With the exception of Ireland and Denmark, that regulation is applicable in all EU Member States.

The last place of habitual residence of the deceased is the decisive factor in determining the competent courts and applicable law. Nothing will change for Austrians who spend their winters in Majorca or Tenerife but spend the rest of the year at home. This is not the case, however, for those whose centre of main interest is abroad – referred to in the EU regulation as ‘habitual residence’. If, therefore, a non-Austrian EU citizen lives in Austria and dies there, Austrian courts will have jurisdiction over the probate proceedings. They will apply Austrian law exclusively in those proceedings, unless the deceased had stipulated otherwise.

Duplication in the old legal situation

To take an example, a retired Austrian man lives together with his partner in a house in Tuscany, while his daughter lives in Austria and his son in Germany. In the event of his death, which court would have jurisdiction and which law would apply? In the past, Austrian law would have to be applied by an Italian court, at least as far as the immovable property of the deceased in Italy is concerned. If he also held a securities account and owned a property in Austria, proceedings would have also been conducted in Austria. The new legal situation has removed these duplications: the entire succession is always subject to the law of the State in which the deceased had his last habitual residence at the time of his death. In our example, therefore, this would be Italian succession law, applied by an Italian court – unless the deceased had stipulated otherwise in his will.

Freedom of choice for the testator

In order to avoid language barriers and save time for his relatives, or if he wants to bequeath everything to his partner and as little as possible to his children with whom he has barely any contact, the testator can specify in his will which law will apply to his succession when he dies. Thus, via the choice of law system, individuals can alternatively specify that the law of succession of the country of their nationality will apply to their succession. In our example, the choice of Austrian law of succession would reduce the two daughters’ share in the inheritance to their reserved share, meaning that the children would each be entitled to a quarter (so together a half) of his estate. He would be able to bequeath the other half to his partner via his will. By way of comparison, under Italian law, the children together would have inherited two thirds as their reserved shares, while the partner would have been entitled to only one third.

Tip

Example cases or illustrating the effects of the EU Succession Regulation in practice can also be found at oesterreich.gv.at. If there is any uncertainty regarding the provisions in an existing will or regarding a planned testamentary disposition, a notary or a lawyer should be contacted. An initial legal consultation is offered free of charge in every Austrian notary’s office. In addition, the Austrian Bar offer an initial orientation talk free of charge under the Erste Anwaltlichen Auskunft (initial legal consultation) initiative.

Inheritance tax

The EU Succession Regulation does not govern inheritance tax matters. Whether inheritance tax is payable on an estate is determined by the national law of the country of the deceased or the heir or by double taxation agreements concluded by the country concerned; such agreements prevent – in cross-border situations – situations in which inheritance tax or other taxes arising in connection with the inheritance (such as property-related taxes) have to be paid more than once.

Tax liability in connection with the inheritance of immovable property is in principle determined by the State in which the immovable property concerned is located.

Advice

No inheritance or gift tax is payable under Austrian law. Inheritances or gratuitous transfers (gifts) of land remain subject to tax on the transfer of immovable property, referred to in Austria as Grunderwerbsteuer (→ USP)German text. However, there is an obligation to declare gifts (→ USP)German text.

Further links

 

Translated by the European Commission
Last update: 5 February 2021
Responsible for the content:
  • Austrian Chamber of Civil-Law Notaries
  • oesterreich.gv.at Editorial Staff