Don’t leave anything behind when you die
So you live your entire life in the Nanny state, and then you die. You’d think that everything you own – having been taxed and taxed for taxes once before – should be tax free, right? I mean, you’d think that whatever you leave behind for your children, siblings, possibly parents would be tax free for them to receive, but no. Of course not; the state wants it’s share, as always.
In Denmark your spouse won’t have to be taxed any inheritance you leave for them. But your children will and any siblings will be taxed even more.
Once you’ve saved up some money from the few Kroner you have left once taxes are deducted, you might decide to invest them in stock or bonds, perhaps buy a house, a car and put a little off to the side for a rainy day.
You get hit by a car and die. Sorry, sir, no more state-benefits for you, but you’re still going to be taxed – of course you are!
In my case it isn’t as bad as it can possibly get. Let’s say I publish this article and walk outside in the gloomy fall weather and get hit by a car. It could happen. I die and all my worldly possessions need to be given to someone.
I am single and there aren’t any charitable organisations I care enough for to leave anything to. This means my left-overs will be taxed.
My current value is very, very low because I haven’t made any movies in quite some time, but I think I leave something along the lines of 20.000,- DKK behind for my mother and my sister to share. They are my only family that I would leave anything to and since I don’t have any children, Sis and Mom are the only ones getting anything from me after I leave this world.
Mommy Dearest; Sorry Sis
My mother and sister are good and sharing things and I do believe they’d share everything equally. So, 10.000,- DKK each. It’s not much but enough for my mother to buy a new computer and fix up a few things on her gardenhouse before she sells it. She ‘only’ has to pay 15% in taxes of the money I have earned, paid taxes on and saved up, leaving her only 8.500,- DKK out of her 10.000,- DKK share.
My sister, however, would have to pay a wopping 36,25% in taxes because she is ‘only’ my sister. Out of the 10.000,- I leave her she only get the 6.375,- DKK. There is, of course, a difference between who gets the money when someone dies and siblings are, apparently, lesser beings in the eyes of the government.
Yes, the danish government is not done taxing you just because you die. They want their share of the cake no matter what because money changes hands and every time that happens, the government takes it’s share. This is a rule that you cannot circumvent legally. If money changes hands, the government takes some of it.
The money has to go somewhere when someone dies, and unless you’re married or leave everything to a charity, whatever is left of your life will be taxed by the government!
Your children, stepchildren (terms and conditions apply), grandchildren, parents, ex-wife or any girl-/boyfriend you have been living with for more than 2 years ‘only’ have to pay 15% of whatever you leave them. Siblings, nieces and nephews and anyone else you care to leave something for have to pay an Inheritance Tax of 36,25%!
Bricks and stones may break you
But there are problems that actually start with this Inheritance Tax. Luckily, I am a poor bastard and I don’t own my home. I rent it, but what if I did own my home? I still only have my sister and my mother to leave anything to, so who should have it? Should it be sold?
Let’s say my mother would like to live in my house, having a little more to remember her son by. That would actually cost her money, because something of value changes hands and the Danish government will have their share!
It is not uncommon for a house to be worth somewhere along the 2 Million DKK mark in Denmark, so let’s say I’ve bought a house around that price. My mother wants to live in it for various reasons but still has to pay 15% Inheritance Tax! That’s 300.000,- DKK she has to pay to the government to take over a house I own. Of course, any loans based in the house or a mortgage still needs to be paid, but in order to take over the house she would have to pay the government for it!
My sister would never get to inherit my home because she would be worse off. To move into my house she would have to pay 725.000,- DKK to the government in taxes!
The problem is, of course, the housing market in Denmark, which sucks. It takes a long, long time to sell a house and when they finally do get sold it’s usually at around 60% of the value. Wanna backtrack that?
I made some money, got taxed, and invested what was left in a home – then I died, and left the home to either my mother or my sister. If they want to keep the house to live in they have to pay for it because the government wants it’s share of anything of value that changes hands. If they sell it they get less than it is worth and still have to pay 15% or 36,25% of the price they eventually get for it.
Don’t leave anything behind!
When a parent dies. anything the children inherits is taxed. A couple of years ago, a friend of mine lost his parents in short order – the father died of old age only 4 months before his mother passed on from cancer – and left everything to him, including their home, which he grew up in and considered Heaven on Earth.
All he wanted to do was move into his childhood home and live there with his wife and two children. Unfortunately, the house was worth a lot of money and as the single heir he could not find the money to pay the government 15% of the official value of the house. But he wouldn’t be able to finance the mortgage on the house and even the property taxes he would be forced to pay later on. It was just the little over a million Kroner he couldn’t come up with in short order. He did try to put his current home up for sale, but it might take too long before it was sold.
His childhood home was forced on sale and he had to pay the mortgage and the property taxes until it was sold. Three years later – being forced to pay mortgage and property taxes on his current home as well as the mortgage and property taxes on his parents home – he was struggling financially, got depressed and his wife had to leave him with the children.
He only recently calculated that the entire ordeal had cost him a lot more than what he had inherited after taxes and the million Kroner he might have bought his childhood home for, if he had been able to come up with the money in short order.
His story is not unique. It happens often in Denmark that someone can’t finance their own inheritance because of the taxes involved. Does government care that you might lose your childhood home to their greed?
Of course not. This has been a problem for decades and no changing government has ever been interested in doing anything about it. After all, in 2015 the danish government raked in 5,2 BILLION DKK (Approx. 780 Million USD!) in Inheritance Taxes alone. That is not a lot of the entire danish tax revenue, which was 941 Billion DKK in 2015, but more than enough to ruin families – not to mention the lack of morality of taxing something that is given to grieving family members.
If ever any politician near you starts rambling about Inheritance Tax; RUN! This kind of tax is not only amoral but also able to ruin the lives of those left behind.