What to do if you inherit a foreign account?

A death always creates a lot of paperwork, especially if the deceased had a foreign account. Besides the grief, there is a lot of hassle involved. Below, we give you an overview of the steps to follow if this happens to you:

1. How do you find out if the deceased had a foreign account?

You need to notify the deceased's banks. First, you need to find out which banks the deceased was a customer of. This is easy with domestic banks, but trickier with foreign ones. You often need a paid service for this, or you can also search yourself through old bank statements, tax returns or correspondence from the deceased.

2. Inform the banks

If you know which banks the deceased had accounts with, you should inform those banks about the death. The accounts will then be blocked until it is clear who the heirs are. For this, you need a certificate of inheritance or a certificate of succession from a notary (with translation and apostille).

3. Unblocking the accounts

With the certificate or attestation of inheritance the heirs can unblock the accounts. Banks often require additional documents such as a death certificate and proof of identity of the heir (with translation). For foreign accounts, requirements may differ from country to country. Get information about this in advance.

If you choose to keep the foreign account, you should declare it on your tax return.

4. Transferring money to your own bank account

If you want to transfer money from the foreign account to your own account, you have to take anti-money laundering rules into account. Banks check whether the money was obtained legally and has undergone the correct tax treatment. If in doubt, the bank may ask for additional documents or refuse the transaction.

5. What information do you need to declare?

In the estate declaration, you have to declare the balance of all accounts. Savings are valued at midnight on the day before the death. For securities accounts, you can choose from three valuation moments: the closing price on the date of death, one month after death, or two months after death. Use the same time for all securities.

6. Paying inheritance tax

During the filing period, heirs can still make improvements to the tax return form. The tax authorities only start processing after a few months (3-5). After processing, the tax authorities will send you an assessment notice. Inheritance tax must then be paid within two months of receipt. Failure to file the return or pay the inheritance tax on time can result in penalties and interest.

Summary

On the death of someone with a foreign account, next of kin must:

• Get a doctor to certify the death and obtain a death certificate.

• Find out which banks the deceased had accounts with, both domestic and foreign.

• Inform the relevant banks and have the accounts blocked.

• Obtain a certificate of inheritance / certificate of succession through a notary public.

• Unblock the accounts using the certificate of inheritance / attestation of succession.

• Transfer money to a bank account in your own country according to the so-called anti-money laundering rules.

• File an estate tax return with the Inland Revenue.

• Pay the inheritance tax after receiving the assessment notice.

• Declaring the foreign account to the Inland Revenue if you choose to keep it.

Follow these steps carefully to handle the deceased's financial affairs correctly and meet all legal obligations. Moreover, always check with local authorities what the specific requirements are in your own country, especially if you are resident in a country outside the EU.