Inheritance Planning in Denmark: Moderate Tax With Real Planning Opportunities

Spouses are fully exempt from inheritance tax in Denmark, while close family members (children, grandchildren, parents) pay 15% on amounts exceeding the tax-free allowance of approximately DKK 321,700 per estate. More distant relatives and non-family beneficiaries face a combined rate of approximately 36.25% (15% plus a 25% surcharge). ${jurName} can help you structure your estate to minimize tax exposure through proper use of exemptions and allowances.

Danish law guarantees your children a minimum of 25% of your estate through forced heirship (tvangsarv), meaning you can freely dispose of the remaining 75% as you wish. This is more flexible than many countries — in 2008, Denmark reduced the forced share from one-third to one-quarter, giving testators significantly more planning freedom. ${jurName} can advise on how to structure your will to maximize flexibility while respecting these minimum entitlements.

Under Danish intestacy law, your estate passes to your spouse and children according to a statutory order of priority, with spouses and children generally inheriting equal shares unless one group is absent. If you have no spouse or children, the estate passes to your parents, then siblings, then more distant relatives. ${jurName} recommends creating a formal testamente (will) signed before a notary or two witnesses to ensure your wishes are followed and to minimize potential disputes among heirs.

Uskiftet bo is an undivided estate that allows a surviving spouse to keep the entire estate intact without immediately distributing the children's forced shares (25% each). This arrangement provides financial flexibility and stability but comes with restrictions — the spouse cannot remarry or make large gifts without settling accounts with the children. ${jurName} can help your family evaluate whether uskiftet bo aligns with your circumstances and long-term goals.

The probate timeline in Denmark typically takes 6 to 12 months from death to final settlement, depending on estate complexity, the need for asset valuations, and whether disputes arise over inheritance or forced heirship claims. The executor must file a boopgorelse (estate account) with the tax authorities and settle all inheritance taxes before distribution. ${jurName} can guide executors through each stage and help ensure compliance with Danish deadlines.

Pension schemes and life insurance policies are generally excluded from the taxable estate in Denmark and pass directly to designated beneficiaries outside of probate, reducing the amount subject to the 15% inheritance tax. This makes them powerful planning tools for reducing tax liability while ensuring loved ones receive funds quickly. ${jurName} recommends reviewing your pension and insurance beneficiary designations as part of a comprehensive estate plan to maximize these tax advantages.

Denmark opted out of the EU Succession Regulation 650/2012, which means Danish inheritance law applies to your Danish estate regardless of your nationality or citizenship — you cannot elect to use your home country's law instead. However, assets located outside Denmark may still be subject to that country's rules. ${jurName} advises expats to understand both Danish law and their home country's requirements, and to create separate wills if they hold property in multiple jurisdictions.