Technical article

If My Kids Move Abroad, Do They Owe Death Tax Where They Live Now, Where I Lived, or Both?

The sources show three ways, and the table sets them side by side.

By Neil Solomon · 4 min read

Picture a father who is a US citizen living in Spain. His daughter lives in Germany and his son in Canada. When he dies, whose tax office takes an interest?

The answer depends on how each country draws its line. The sources show three ways, and the table sets them side by side.

Follow the father through the table. The United States reaches him as a citizen, on his assets everywhere. The exclusion is US$15 million per person for 2026, and the top rate above it is 40%. Spain reaches Spanish-situs assets and taxes residents on what they acquire. The daughter, as a German resident, may be reached by Germany on what she receives, with rates of 7% to 30% for the closest family after an allowance of EUR 400,000 for a child (approximately US$440,000). The son in Canada meets no inheritance tax. Canada does treat a death as a sale of the deceased's property, and taxes the gains in the final return.

So the father's estate meets the US rule and any Spanish assets meet the Spanish one. The daughter meets the German rule, and the son meets none. Each country's rule is its own.

Where the lines move. Two rules extend a country's reach beyond a move. The UK tail keeps a person in after leaving, three years for those with 13 or fewer years of residence and up to ten for those with 20. Germany keeps its citizens in for five years. The Dutch rule looks back ten years for nationals and one year for gifts. A parent who plans a move may want to read these tails against the date.

Treaties. The IRS lists estate and gift treaties with Australia, Austria, Denmark, France, Germany, Japan and the UK, and estate-only treaties with eight others. None is listed for Spain, Portugal, Belgium or Mexico. A treaty can narrow what counts as US-situs, or give a credit. Germany has few such treaties and gives a unilateral credit for foreign inheritance tax.

You might say: "Surely the country where my children live is the only one that matters." For many families it is, as the Canada example shows. But the United States, the UK and the Netherlands follow the person who died. The US tax is charged on the estate before a child receives anything, so a child in a place with no inheritance tax is still affected. A child in Germany can owe tax on what comes from a parent's estate anywhere in the world.

You could write down five facts: the parent's citizenship, the parent's years of residence, where each child lives, where the assets sit, and any treaty.

If your children live in a different country from you, which of these rules surprised your family the most? Share it here, because someone with the same map ahead may benefit from your story.

Figures are estimates for planning, based on public data. Date read: October 2026.