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 inheritance tax return must include information about all assets and liabilities of the deceased as of the date of death. If the deceased was married, the marital assets and liabilities of the surviving spouse must also be included, unless the spouses had separate property arrangements.
Once all assets and liabilities have been entered in the inheritance tax return, the net value of the estate can be determined. If the deceased was married, the surviving spouse’s share of the marital property is deducted in accordance with the rules of the Marriage Act.
The net value of the estate is divided among the heirs according to their respective shares of the inheritance.
The inheritance tax return must include each heir’s name and Icelandic ID number (kennitala), their relationship to the deceased, and their share of the inheritance.
Inheritance tax is payable on the amount exceeding the tax-free threshold. Each heir is entitled to a tax-free amount in proportion to their share of the inheritance.
Example: The total tax-free amount is ISK 6,789,790. If an heir’s share of the inheritance is 33.33%, their tax-free amount is ISK 2,263,037. If an heir’s share is 22.22%, their tax-free amount is ISK 1,508,691.
The completed and signed inheritance tax return, together with the required supporting documents, must be submitted to the District Commissioner handling the estate settlement.
If it is not possible to submit the inheritance tax return electronically, or if you choose to submit it on paper, please note that in the Reykjavík Capital Area you must book an appointment to submit the completed and signed paper return together with the required supporting documents.
All heirs must sign the inheritance tax return unless they have appointed a representative to act on their behalf in the private settlement of the estate. In that case, it is sufficient for the appointed representative to sign the inheritance tax return.
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.
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 6,789,790. If the heirs' inheritance ratio is 33.33%, the untaxable portion is ISK 2,263,037. If the heirs' inheritance ratio is 22.22%, the untaxable portion is ISK 1.508,691.
If the individuals who need to sign the report do not have electronic identification, the inheritance report must be completed on paper.
Service provider
District Commissioners