There is no inheritance tax in Russia, but inheritance law comes into play when expats die without a valid will. We look at the financial implications.
Inheritance laws in Russia are built around the idea of social justice, providing for family members who cannot care for themselves. Foreigners living in Russia, therefore, should make wills in Russia, particularly when they own Russian property or other assets, and want to make bequests to people beyond their immediate family, siblings or distant relatives.
This guide offers an overview of Russian inheritance law and how it affects expats and their families. Sections include:
Inheritance laws in Russia and succession rules
Russian inheritance laws follow the Civil Code and the Civil Procedure Code of the Russian Federation as well as the Russian Fundamental Legislation on Notarial System. Section 5 of the Civil Code deals with the Law of Succession.
Inheritance laws in Russia cover anyone domiciled in the Russian Federation. This includes all official residents, both Russian nationals and foreigners living in the country. In addition, non-residents who own property in Russia will see at least part of their estate divided according to Russian inheritance law.
This law also applies to all worldwide assets of Russian residents with the exception of real estate overseas. When it comes to property abroad, a foreigner’s national inheritance law may become applicable. Russian courts will then apply this law instead, legal conflicts notwithstanding.
Forced heirship laws in Russia
Russian inheritance law protects the rights of minors, as well as any disabled dependents, including the deceased’s spouse, children, parents, and other dependents. Such survivors are automatically entitled to 50% of what they would have received under the laws of intestate succession – whether or not there is a Russian will in place.
The law also recognizes joint matrimonial property as the standard. As such, unless a marital contract declares otherwise, a married couple owns their assets jointly. Therefore, the surviving spouse automatically retains 50% of all assets upon death. A surviving spouse may use succession laws of a different country only if the couple were of different nationalities or did not live together.
The remaining half of the property may be divided according to the deceased’s wishes only if a Russian will exists.
What if there is no will?
If an expat living in Russia dies without leaving a Russian will, his or her estate must be divided in line with the Federation’s laws of intestate succession.
Inheritance laws in Russia require a certain order of succession. The heirs of a deceased person fall into four large categories:
- First group: Children, spouse, and parents
- Second group: Siblings (including half brothers and sisters) and grandparents
- Third group: Distant relatives such as aunts and uncles
- Fourth group: More distant relatives, such as step-children, step-parents, and other dependents.
By law, people in each category have equal inheritance rights. So if an individual has no surviving children, spouse, or parents, their property, and assets pass equally to the grandparents, brothers, and sisters.
If there are no disputes, a notary will open estate proceedings and will issue certificates to the right of inheritance in accordance with Russian inheritance law. Such certificates remain valid for a maximum of six months. You can apply to a court to reissue them, or you can do this on the agreement of all the heirs.
However, inheritance proceedings must be opened in the deceased’s last place of residence, except in cases where this is unknown, or situated outside the Russian Federation. In such cases, successions must be launched wherever the deceased owned immovable property (or wherever such property is most valuable), or if there is no immovable property, in the place where the most valuable movables are.
Heirs must accept any inheritance within six months of the opening of succession. They may reject an inheritance under Russian inheritance law. Additionally, a foreign heir may authorize a representative within the Russian Federation to accept an inheritance on their behalf.
How to approach inheritance disputes under Russian law
Creditors and heirs must approach Russian courts to resolve disputes related to the estate of a deceased person. You must file any claim immediately and at a court located in the place of opening of the succession. Indeed, Russian courts only entertain contests and claims against foreigners’ property if the deceased lived within the Russian Federation and/or if the property in question is situated in the Russian Federation.
Given the legal nature of such disputes, creditors and heirs should consult a lawyer before launching any inheritance contests in Russia.
Inheriting pensions in Russia
If the deceased was claiming a Russian pension, certain family members can claim money in the form of a survivor’s pension. In total, there are several types of survivors’ pensions in Russia.
Russian inheritance tax
There has been no inheritance tax in Russia since 2006; therefore, you won’t have to file anything if you inherit part of a Russian estate. This applies regardless of the individual’s residency status. Gift taxes on donations have also been abolished. However, gifts of real estate, vehicles, and quoted or unquoted shares between non-family members are subject to personal income tax at 13%, and the recipient must pay these taxes.
Note that gifts from family members or close relatives are not subject to PIT. Other assets may be gifted to anyone without incurring taxes.
When an heir inherits real estate, they must pay land and/or property taxes from the date of the testator’s death (from the date of opening the inheritance), even if they only receive a certificate of ownership later on. However, an inherited car only becomes liable for transport tax from the date of re-registration of the car in the heir’s name.
Securing your heirs’ inheritance in Russia
Inheritance laws in Russia are fairly straightforward and relatively easy to understand. But if you’d like to secure your assets for your heirs, it’s best to consult a lawyer about drawing up a will and other professional matters.
You may find the following links useful on matters of tax and inheritance taxes in Russia: