Inheritance tax on foreign assets: the exemption is closing
For decades many countries barely taxed inheritances of foreign assets. That tolerance is ending across the region — and moving assets abroad is no shield.
For a long time, a family with an apartment in Punta del Este, an account in Miami or a company abroad lived under a comfortable rule: when those assets passed by inheritance or gift, the home country’s transfer tax, in practice, did not reach them. Not by planning — by gaps in the law, limits on jurisdiction, or simple inaction by the tax authorities.
That comfort is ending. One after another, countries of origin are closing the door that kept foreign assets out of reach of the transfer tax. And anyone planning an international estate on the premise that “what sits abroad pays nothing” is starting from a base that is no longer true.
This article explains the principle behind the trend, why moving assets abroad does not automatically shield them from your home country’s tax authority, and what to check before the window closes in your jurisdiction.
The principle: residence and domicile carry weight
There is a widespread — and mistaken — intuition that simply moving assets out of the country moves them out of inheritance tax. The reality is less comfortable: inheritance and gift tax tends to follow the domicile or residence of the parties, not only the location of the asset.
In general terms, and with variation by jurisdiction:
- For real estate, the tax tends to be due where the property sits.
- For movable assets, securities, receivables and shareholdings, jurisdiction tends to follow the domicile of the deceased (in an inheritance) or the donor (in a gift).
The practical consequence is that the tax domicile of the parties now carries estate weight. The decision of where the family actually resides — and how that residence is formalised — is no longer neutral for the inheritance of foreign assets. It is the same thread that runs through tax residency and international succession: they are not separate questions.
The regional trend: the end of “non-taxation”
The movement is neither isolated nor accidental. Several countries are, at the same time, revisiting the taxation of transfers of foreign assets, introducing mandatory progressive rates by value and expanding enforcement.
One concrete, recent example illustrates the direction: Brazil, which for nearly three decades could not tax inheritances and gifts of foreign assets for lack of a federal complementary law required by its Constitution, enacted in 2026 the rule that finally enables that state-level power — with a market-value tax base and progressive rates. We do not claim the Brazilian rule applies to residents of other countries; we use it as a signal of a direction the region is following.
The message for anyone with an international estate is the same, whatever your country of tax residence: the “what sits abroad pays nothing” window is closing, and it is worth reviewing your position before it closes entirely in your own jurisdiction.
A note on responsibility: inheritance and gift tax rules — including jurisdiction over foreign assets, rates and exemptions — vary significantly between countries (and even states or provinces), and are under review in several of them. This article describes a general principle and a regional trend; it does not replace analysis of the law applicable to your specific tax residence. Before any decision, we confirm the rules in force in your jurisdiction and in the jurisdiction where the assets sit.
The other tax authority: the US estate-tax trap
There is a point that reaches every non-US person equally — European, Latin American, of any nationality — and that is routinely overlooked: the US estate tax on assets situated there.
For a US citizen or resident, that tax only reaches very large estates. For a non-resident, non-domiciled individual, the exemption is just US$60,000, and above that the rate reaches 40%. Real estate is, by definition, situated in the US. And because many countries have no estate-tax treaty with the US, there is no widening of that exemption and, generally, no reciprocal credit: the same asset can be reached by the US estate tax and by the inheritance tax of the country of residence, with neither offsetting the other.
In other words: moving wealth to the US, far from shielding an inheritance, can add a severe estate exposure.
Two familiar instruments, read carefully
Two common tools of international planning deserve a precise reading.
Trust. The mere creation of a trust and the transfer of assets to the trustee, in the jurisdictions that regulate it, are generally not the event that triggers the tax; that tends to arise on the effective transfer to beneficiaries (on the settlor’s death or on an early distribution). It is not a veil that erases the owner before the tax authority: it is a structure with defined moments of taxation.
Life insurance. Risk life insurance, in many jurisdictions, sits outside the estate, because the indemnity arises from a contract rather than from a gift. But using the product as disguised investment, with disproportionate contributions on the eve of the event, is exposed to recharacterisation. The instrument serves protection, not a manoeuvre.
What to check before the window closes
Three operational conclusions, valid whatever your country of residence.
The domicile of the parties is an estate decision. Where you are tax resident, and how that residence is formalised, interacts with inheritance tax on your foreign assets. It is not a migration detail: it is a planning variable.
Structures built to “escape” the tax need re-reading. A holding company abroad or a property in Punta del Este that once passed without tax under the old rules now enters a scenario in which the family’s country of residence may tax the transfer. That does not invalidate the structure; it changes what it protects and what it does not. The transfer of assets specifically in Uruguay, where local law also imposes rules on the owner’s wishes, we cover in Wills in Uruguay.
The window is real, but temporary. While the rule in your jurisdiction has not changed or taken effect, certain gifts and reorganisations can still be made under current conditions. Bringing forward a planned gift or documenting market values are moves that make sense now for someone who already intended them — and none as a panic reaction. The difference lies in analysing the specific case, not in haste.
Frequently asked questions
If my assets are abroad, can my home country still tax the inheritance?
It depends on your jurisdiction, but the regional trend is yes: inheritance tax tends to follow the domicile of the parties, not only the location of the asset, and several countries are closing the non-taxation of foreign assets.
Does moving abroad shield the inheritance of my assets?
Not automatically. Jurisdiction over movable assets tends to follow the domicile of the deceased or donor, and correctly formalising your residence is decisive.
I own US real estate. Is there an estate risk?
Yes. For non-residents, the US estate-tax exemption is just US$60,000, with rates up to 40%, and many countries have no treaty with the US to mitigate it.
Does life insurance fall into the estate?
Risk life insurance generally sits outside the estate, but using it as disguised investment can be recharacterised.
How to verify for yourself
- Inheritance tax in your jurisdiction — check the tax authority of your country (and, where relevant, state or province) of tax residence.
- US estate tax for non-residents — the IRS page on estate tax for a “nonresident not a citizen”.
- Information exchange — the OECD on the automatic exchange of financial account information.
If any point differs from the official source when you read it, the official source prevails.
Where to start
The non-taxation that protected foreign wealth was never a strategy — it was the absence of a rule. And across the region, those absences are being filled.
What replaces it is not the end of planning. It is planning that must weigh, at once, your country of residence, the location of the assets, the state of the applicable rule and the interaction with other tax authorities.
That is what our work in succession and inheritance and wealth protection is about: looking at your specific case, on both sides of the border, before the window closes.
One conversation is enough to know what, in your case, can still be decided.
Informational content. It does not constitute legal, tax, accounting or investment advice. The rules and trends cited were verified against the official sources indicated in July 2026 and depend largely on the law of each jurisdiction. Each individual situation produces different results and should be analysed case by case.