A recently passed law change will significantly reduce the financial burden on siblings receiving inheritance.

Under the new rules, as of 2027, only 15% of the inheritance will be subject to estate tax, a significant reduction from the previous rate of 36.25%.

 

No additional estate tax for siblings

The new legislation means that the additional estate tax will no longer apply to siblings who inherit. This applies to full siblings, half siblings and siblings adopted by at least one of the deceased's parents. However, foster and step-siblings are not included in this exemption. Previously, siblings had to pay a total estate tax of 36.25%, but with the new law only 15% is payable, which represents a significant relief.

However, there is a special exception that already existed in the current rules: if the testator was childless and the inheritance constitutes an active business activity, there have been certain relaxations in the tax. The new legislation extends this relief to all inheritances to siblings, regardless of whether the inheritance includes a business or not.

Increasing the tax-free threshold

In addition to the changes to the estate tax for siblings, the Danish Parliament has also adopted an increase in the tax-free threshold for estate taxes. From 2024, an inheritance tax of 15% of the values exceeding a basic deduction of DKK 333,100 will be payable. The basic deduction will be increased to DKK 360,300 (2024 level) in 2026 and to DKK 388,200 (2024 level) in 2029.

This change is a step towards easing the financial burden of inheritance, allowing heirs to keep a larger portion of the inheritance they receive. These adjustments reflect a political desire to make inheritance less burdensome for families, especially when it comes to siblings.

Conclusion

With the new amendment from the Danish Parliament, inheritance taxes for siblings will be significantly reduced and the basic allowance increased. These measures will come into effect from 2027 and are designed to reduce the financial burden of inheritance, giving siblings greater financial security when inheriting.