.An inheritance tax is payable when acquiring an estate in Hungary.
In case of succession
The transfer of the estate upon the death of the testator is determined by the probate procedure. The settlement of succession necessary for the probate procedure shall be performed by the municipality notary, and the notary public is responsible for establishing the estate and transferring it to the heirs.
The notary public notifies the NTCA of the order on the transfer of the estate ex officio.
A probate procedure is not necessary if no settlement of succession can be drawn up (for example because the value as specified by law of the immovable property inherited by each heir does not exceed HUF 300 000). In this case, the heir has to report the inherited chattels to the NTCA.
A late penalty is payable in case of a default on the payment of the duty, the rate of which is one 356th part of the base rate of interest as defined by the central bank, plus 5 percentage points, after each calendar day of default.
If the notary public does not conduct the probate procedure, an omission fee shall be payable for the omission or the incomplete or late fulfilment of the heir’s reporting obligation, the amount of which may not exceed HUF 200 000 in the case of natural persons.
Within 60 days of the submission of the effective grant of probate, the NTCA shall determine the amount of inheritance tax in a decision, which is payable within 15 days of the decision becoming final.
If the notary public does not hold a probate procedure, the heir shall notify the tax authority of the chattels of the estate within 90 days of the death of the testator, after which the NTCA shall determine the amount of inheritance tax within 60 days.
If the notary public holds a probate procedure, it shall send the effective grant of probate to the NTCA ex officio and the heir shall have no additional tasks.
If the notary public does not hold a probate procedure, the heir shall be required to submit an estate report form (HK form).
The general rate for the inheritance tax is 18 % of the market value of the estate after encumbrances have been deducted (clean value) and 9 % in the case of the acquisition of residential property and the related concessions.
The notary public with a registered office in the place of the testator’s last official address or place of residence in Hungary will be the notary public competent for conducting the procedure; in the absence of this, the notary public with a registered office in the place where the testator died in Hungary will be the competent notary public; in the absence of this, the notary public with a registered office in the place where the assets of the estate are located will be the competent notary public; in the absence of any of the above, the notary public designated by the Hungarian National Chamber of Notaries, on the basis of an application submitted by the interested party in the inheritance, will be competent.
An appeal may be submitted to the NTCA Appellate Directorate against the NTCA’s decision of first instance, and a supervisory measure may be requested on one occasion within one year of the decision becoming final, with a reference to an infringement. Duties are payable for the appeal and the application for a supervisory measure.
The taxpayer may contest the legality of the appellate decision passed by the NTCA Appellate Directorate in an administrative lawsuit.
Inheritance tax shall be payable for the chattels of the estate of a non-national living in Hungary and for concessions of a foreign estate if no inheritance tax or any corresponding tax is payable in the state of the estate. The heir shall be required to provide proof of payment of duties or taxes abroad.
A number of discounts and exemptions are available in the case of succession (e.g. direct-line descendants and spouses are provided exemption), in which case the tax authority shall not pass a decision. An exception is the tax-exempt inheritance of a plot of land on which the heir builds a residential house within 4 years of the final transfer of the estate.
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Act XCIII of 1990 on Duties
Act XXXVIII of 2010 on the Probate Procedure
Act CL of 2017 on the Rules of Taxation
Act CLI of 2017 on the Code of General Administrative Procedure