The siblings’ inheritance and gift duty exemption: procedural details

Due to the amendment to the Duty Act, inheritance and gifts between siblings, regardless of value, are exempted from duty starting from 8 July 2020. Previously, only the free asset movements between the straight-line relatives and spouses (widows) were duty-exempt.

For the purposes of exemption, siblings, half-siblings and adoptive siblings are also considered siblings, provided that such siblings have one common parent or adoptive parent.

The new rule also applies to pending cases, so any gift or inheritance between siblings in which the Hungarian Tax Administration (the “NAV”) has not yet brought a final (legally binding) decision by 8 July 2020.

Since 8 July 2020, a gift acquired from a sibling should not be reported to NAV. NAV treats the acquisition of property as duty-exempt, provided it can be clearly established from the documents of acquisition that it is an inheritance or a gift between siblings. In the case of a gift of immovable property (real estate), the exemption must be indicated on Form B400 submitted to the Land Registry.

If NAV levied a duty on an asset transfer between siblings, but this decision (in the form of a payment order or a decision notice) was not yet final (legally binding) on 8 July 2020, then a cancellation of the levied duty or a refund of the paid duty may be claimed.

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