Inheritance tax can be a significant expense, especially if the inheritance includes immovable property that cannot be sold. Many people in Finland are experiencing difficulties in paying inheritance tax. A survey commissioned by insurance company Lähi-Tapiola revealed that half of Finns either have received or anticipate receiving an inheritance that requires payment of inheritance tax. This tax must be paid on inheritances worth 20,000 euros or more, and many individuals struggle to cover these costs without external funding.
Selling estate property or the heir’s own property is another common strategy to cover these expenses. However, nearly one in ten respondents who received or will receive an inheritance had to take out a loan to pay for the inheritance tax. In situations where the inheritance consists of immovable property that cannot be sold, the heirs may face even greater challenges.
The most common ways to cover inheritance tax expenses are using the estate’s savings or the heir’s own savings. Selling estate property is another common strategy, as is selling the heir’s own property. However, more than 10 percent of respondents admitted to not preparing for the future costs of inheritance tax at all.
The survey results also highlight the growing issue of unpaid inheritance taxes in Finland. Last year, almost eight million euros in inheritance taxes were subject to enforcement actions. The number of people paying inheritance tax has also increased, with over 100,000 individuals paying an average of 10,000 euros each. Interest on unpaid taxes is also a concern as it has increased to 7.5 percent.
While planning for future taxes and seeking financial guidance can help individuals navigate these complex financial responsibilities, some may need to take out loans or sell their property to cover these expenses promptly.
Addressing these obligations promptly helps avoid accruing additional interest and ensures compliance with legal requirements.
In conclusion, although there are various ways to cover the cost of inheriting immovable properties worth over €20K euros in Finland such as using estate savings or taking out a loan; many people still find it difficult due to lack of preparation and rising interest rates on unpaid taxes. It is crucial for individuals to plan ahead and seek financial advice before inheriting any assets.