Inheritance financial statement

Upon the completion of the estate's division of death or payment of any inheritance prepaid, a will be completed and a statement of inheritance returned to the District Commissioner where the division takes place.

The heirs/agent must submit the report within the time limit set by a licence for private exchange.

General information on the inheritance statement

A will is a form for calculating the tax base of inheritance tax and inheritance tax on heirs. The form automatically calculates all amounts when information on the date of death, assets, liabilities and inheritance ratios has been filled in.

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 date of death shall be replaced by the date of exchange.

The tax base of inheritance tax on the settlement of an estate is calculated by adding together the value of all the assets of the deceased available on the date of death and deducting his or her debts and other costs which may be deducted.

Completion of inheritance report

The information on all the assets and liabilities of the deceased on the date of death shall be completed on the inheritance report. If the spouse has been deceased, the marital assets and the spouse's debts must also be filled in, except in the case of a private property arrangement.

When information on assets and liabilities has been completed in the inheritance report, the net worth is revealed. If the estate portion of the surviving spouse was deceased in marriage, the provisions of the Marriage Act deduct the estate portion.

The net assets of the estate shall be distributed between the heirs in accordance with the proportions of the estate.

The inheritance report shall record the name and ID number of the heirs, the relationship with the deceased and the inheritance rate.

Attachment data

A genetic report shall be accompanied by information as appropriate on:

• the value of vehicles, aircraft and vessels on the day of death.

• deposits with banks and savings banks on the day of their death.

• bonds, securities and claims outstanding on the day of death.

• other specified assets as appropriate, for example, an enterprise's annual accounts, the value of residence rights or intellectual property rights.

• payments received after the day of death, e.g. pension payments or refunds from the Tax.

• funeral costs (link)

• Debts on the day of death, for example, loans, government expenditures and other debts as appropriate.

A genetic report may also include:

• declarations of division (link)

• private exchange (pursuant to Article 93 of the Act on Exchanges)

• a bill for distribution if the estate of the deceased is divided into public divisions.

Instructions for completing a genetic report

A will be submitted, completed and signed, with supporting documents, to the district commissioner where the exchange takes place. The sheriff of the capital area must make an advance appointment to submit a heirloom report.

All heirs are required to sign a will unless they have appointed an agent to represent them in the course of the personal settlement. It is sufficient that the Ombudsman sign one inheritance report.

Inheritance tax

Inheritance tax shall be paid on the amount exceeding the tax-freedom threshold. Inheritance is granted tax freedom in proportion to its inheritance. Example: The untaxable fraction is ISK 6,203,409. If the heirs' inheritance ratio is 33.33%, the untaxable portion is ISK 2,067,596. If the heirs' inheritance ratio is 22.22%, the untaxable portion is ISK 1.378,397.