Inheritance tax

On the exchange of an estate at death, assets and liabilities shall be recorded in accordance with their value on the date of death.

In advance payment of inheritance, assets shall be registered in relation to their status on the date the district commissioner endorses the inheritance report.

If a spouse has been issued a licence to sit on an unallocated estate and the exchange takes place while he/she is still alive, the assets and liabilities shall be recorded in relation to their status on the date the magistrate endorses the inheritance report.

If a spouse has been issued a licence to sit on an unallocated estate and the exchange takes place after the death of both spouses, the assets and liabilities shall be recorded in relation to their position on the date of death of the more long-lived spouse. In the case of the exchange of joint estate of a married couple, a single inheritance report shall be prepared, irrespective of whether the heirs of both spouses are the same person or not.

Assets

Inheritance statement must record the value of all assets to be valued for money, including real estate, vehicles, aircraft and ships, deposits, balances with banks and savings banks, bonds, securities and outstanding claims, shares, money and other assets such as tools, intellectual property rights, other rights such as power of purchase, etc. Both assets located in Iceland and abroad shall be registered.

Value refers to the general market capitalisation of the assets in question. Information on market capitalisation can be obtained from financial undertakings or from a seller. The value of the following assets, however, is subject to special rules:

1. Real estate

Real estate shall be registered on a property valuation (overall valuation) as registered with it on the date of the death of the heir. Information on property valuation is in tax returns.

If the general market value of a property is considered to be lower than the property value, heirs may request that the district commissioner appoint an assessor to assess the market value of the property. The condition for the estate is that the property has not been sold off.

If the district commissioner has appointed an assessor, the assessment price may be recorded on a will report instead of a property assessment. The assessment may not be more than four weeks old when a genetic report is submitted.

If a property was deceased with a right to redemption, inheritance tax shall be levied on the redemption price if this is lower than the property valuation price.

2. Deposits with banks and savings banks

Deposits in banks and savings banks shall be registered together with accrued interest and/or indexation on the date of the death of the heir. The numbers of all bank accounts shall be recorded. It is permissible to deduct capital income tax from accrued interest and/or indexation.

3. Debt securities and outstanding claims

Bonds which have been issued to the owner, as well as other credits and outstanding claims, shall be registered together with accrued interest and/or indexation on the date of the death of the heir. The name and ID number of the issuer shall be recorded.

4. Shares

• If shares in a company are admitted to trading on a regulated market, they shall be entered on a will report at the purchase rate as it was at the close of the market before the day of death.

• If shares in a company are not admitted to trading on a regulated market, their current price shall be based on the price of the company in the course of trading.

• If neither the purchase rate nor the current price is available, the carrying amount of the equity in accordance with the last audited annual or interim financial statement of the company in question shall be taken into account, plus any acquired intangible assets valued for money which generate future dividends but are prohibited by law from being booked, such as acquisition warrants. For information , please contact the banks and your company's annual financial statement on the Internet site .

5. Livestock

Livestock shall be registered at the price on which the last tax return of the heir before the date of death is based.

6. Assets sold at auction (excluding real estate)

When assets other than real property have been sold involuntarily, the auction proceeds shall be used.

Liabilities

Functional expenses, public levies and other debts shall be reduced on the tax base of the estate when calculating inheritance tax and shall be recorded in the inheritance report. If the spouses died, the debts of both spouses shall be recorded, except in the case of a private property arrangement. Debt owed in Iceland and abroad shall be recorded as a both-is.

It is also permissible to deduct the cost of appointing an assessor if the sheriff has appointed an assessor to assess the value of the property of the estate at death.

The cost of exchanging an estate on death is not deducted as a liability on an inheritance report. Inheritance tax levied on the heirs is not deducted as a liability on the inheritance report.

Debts or costs of calculating inheritance tax may not be deducted from inheritance payments made in advance.

All information in a genetic report shall be supported by documentation.