Inheritance and gift tax, Portugal vs Germany: 10 % stamp duty against 7–50 %

Portugal: stamp duty, and who is exempt

Since 2004 Portugal has no inheritance or gift tax. Gratuitous transfers — on death or by gift — carry stamp duty of 10 % (verba 1.2 of the general table) on the taxable value: the tax value (VPT) for property, the nominal or book value for shares, the balance for accounts. Property transfers add 0,8 % (verba 1.1).

The exemption is what matters: spouse or registered partner, children and grandchildren, parents and grandparents pay nothing (Stamp Duty Code, art. 6.º e). Siblings, nephews, unmarried partners without a registered union, friends and stepchildren pay the 10 %.

Portugal taxes transfers of assets located in Portugal only: property here, shares of Portuguese companies, Portuguese bank accounts. A German account or flat inherited by a Portuguese resident is outside Portuguese stamp duty — and inside German tax if either side is German-resident or a German citizen within five years of leaving.

• 10 % Portuguese stamp duty on gifts and inheritances — 0 % between spouses, children, grandchildren and parents
• 500 000 € / 400 000 € German allowances for a spouse / each child, then 7 % to 30 %
• 5 years after emigration during which a German citizen remains fully liable in Germany
• No treaty between Portugal and Germany on inheritance tax; double taxation is relieved only by German unilateral credit (§ 21 ErbStG)

Germany: worldwide, with allowances

Germany taxes the acquisition — each heir or donee, not the estate — on the worldwide assets received when the deceased/donor or the recipient is resident in Germany, or is a German citizen who left less than five years ago (ErbStG § 2). Only when both sides are outside that net does German tax shrink to German-situs assets (property, business assets, 10 % shareholdings).

Allowances renew every ten years for gifts. The family home passes to a spouse free of tax if kept as their home for ten years; business assets have their own reliefs.

The five-year rule, with an example

A German couple moves to Lisbon in March 2026 and gives up the German residence. Until March 2031 any gift they make and any inheritance they leave — including the new Portuguese house and a Portuguese account — is subject to German tax as if they still lived in Cologne; the Portuguese exemption for children is irrelevant to the Finanzamt. From March 2031 only German-situs assets remain taxable in Germany.

If the heirs live in Germany, the clock never matters: a child resident in Germany is taxed on whatever they inherit from a parent in Portugal, with the 400 000 € allowance, and Germany credits any Portuguese stamp duty on Portuguese assets. The reverse case — heirs in Portugal, parent in Germany — is German tax on the whole estate, Portuguese stamp duty only on Portuguese assets and only for non-exempt heirs.

Which law governs the estate

The EU Succession Regulation (650/2012) applies in both countries: the law of the deceased’s last habitual residence governs the whole estate — Portuguese law, with its forced heirship (the spouse and children together are entitled to at least half, and up to two thirds, of the estate) — unless the will chooses the law of the deceased’s nationality. A German resident of Portugal can therefore choose German law in a will and keep the German freedom to dispose, subject to the German compulsory-share claims (Pflichtteil). The choice of law does not change the tax: each country taxes by its own rules.

Planning that works

• Gifts after the fifth year, once German unlimited liability has ended, of assets outside Germany: Portuguese exemption for children, nothing in Germany.
• Gifts inside the five years only within the German allowances (400 000 € per child every ten years), with the German gift-tax return filed.
• German property stays taxable in Germany whatever the calendar; consider transferring it before the move within allowances, or accept German tax on it alone later.
• Life insurance proceeds, PPR retirement plans and pension funds are outside Portuguese stamp duty (Stamp Duty Code, art. 1.º n.º 5); in Germany a life-insurance payout to a named beneficiary is a taxable acquisition.
• A will in Portuguese or German form, with the choice of law written in, and registered where it can be found.

Questions