A revolution in inheritance law. New rules of inheritance coming soon

No more tax chaos after the death of loved ones? There will be changes in the regulations on inheritance and donation tax. The new regulations are intended to solve the problem of the unclear moment when tax liability arises – an issue that has been causing problems for years for heirs who are unaware that they have inherited property and should settle accounts with the tax office.

There will be changes in inheritance law

On Tuesday, October 14, the Council of Ministers adopted a draft bill that provides for the simplification of procedures and protection of heirs against the loss of tax exemptions.

According to the project, it will be possible to restore the deadline for all titles to the acquisition of property subject to inheritance and donation tax. This will apply not only to exemptions for the immediate family, but also to exemptions related to the acquisition of enterprises after a deceased natural person, where the condition is timely submission of the application.

– The proposed change in inheritance and donation tax is definitely needed. The current legal situation causes many absurdities, especially in the case of the so-called zero tax group, i.e. immediate family. In practice, if someone was late in reporting the acquisition of an inheritance, even by a few days, he lost the right to exemption and had to pay tax, even though in principle there should be no tax in this group. This is the result of formalism, which has been controversial for years and led to unfair situations – notes Piotr Juszczyk, Chief Tax Advisor at inFakt, in an interview with “Wprost”.

What does “the creation of tax liability” mean?

The regulations in force so far mean that the heirs are not always aware that they have been entitled to the inheritance. As a result, they often fail to meet deadlines related to tax obligations.

Under Polish law, a potential heir has six months to reject the inheritance, and this period is counted from the moment he learned about his appointment to the inheritance – and not necessarily from the moment of the testator’s death. This is a discrepancy that, in practice, gives rise to many misunderstandings and tax problems.

Establishing a tax obligation – what will the amendment change?

As the expert explains, after the entry into force of the amendment, the moment of tax liability will be associated with the moment of obtaining a document confirming the inheritance, and not with the acceptance of the inheritance itself.

– This is a rational solution, because many heirs do not even know that they have acquired an inheritance, and the tax obligation arose “automatically” – explains Juszczyk.

In his opinion, the change will increase legal certainty, reduce the risk of errors and avoid situations in which unconscious failure to meet the deadline results in serious financial consequences.

– In my opinion, this is one of those amendments that simply improves the relationship between the taxpayer and the tax office, without prejudice to the budget, and with a great benefit to the sense of fairness of the tax system – notes the tax expert.