Inheritance and Estate Tax in Bahamas

The Bahamas is one of a small number of jurisdictions worldwide that imposes no inheritance tax, no estate duty, no gift tax, no personal income tax, and no capital gains tax. The Government funds itself primarily through value-added tax (VAT), customs duties, real-property tax, and business-licence fees. For individuals and families holding wealth in The Bahamas, this creates a fundamentally different succession environment than most OECD countries.

Does The Bahamas have an inheritance or estate tax?

No. The Bahamas does not impose an inheritance tax, estate duty, or gift tax on any assets, regardless of their value or where the beneficiary lives. The Department of Inland Revenue (DIR) confirmed this in its current guidance: "There are no inheritance, estate, or gift taxes in The Bahamas." [1] PwC's Bahamas Individual Tax Summaries for 2026 state the same position without qualification. [2] This has been the settled law for decades, and no pending legislative proposals would change it as of mid-2026.

The absence of estate taxation applies equally to Bahamian citizens, permanent residents, and foreign nationals whose assets are located in The Bahamas. There is no wealth tax, no net-worth levy, and no deemed-disposal rule on death.

What does happen when someone dies in The Bahamas?

While no tax is triggered by death itself, an estate must still pass through a legal administration process before assets can be distributed.

Probate through the Supreme Court. All estates with Bahamian assets require either a Grant of Probate (where a valid will exists) or Letters of Administration (where the deceased died intestate) from the Probate Division of the Supreme Court of The Bahamas. A foreign grant obtained abroad must be resealed in The Bahamas before a personal representative can deal with local property. [3] In uncontested matters, once all documents are filed, probate is typically granted four to six months after submission. An estate return must be filed within six months of the grant on New Providence, or nine months on other islands.

Professional and court fees. Legal fees begin at a minimum of BSD 2,500 and scale with the total value of Bahamian assets. Court filing fees payable to the Probate Division can reach up to BSD 800. A bond of approximately BSD 400 with two sureties is required when probate is granted. These costs are administrative, not taxes.

Real-property conveyance VAT. When estate property is formally conveyed or sold after probate -- rather than transferred to heirs by deed of assent -- a VAT charge on the conveyance may arise. As of July 2023, The Bahamas replaced stamp duty with VAT on real-estate transactions. Rates for Bahamian citizens are graduated from 2.5% (properties up to BSD 100,000) to 10% (properties over BSD 1,000,000); foreign buyers pay a flat 10%. [4] Critically, deeds of assent -- the instrument used to transfer real property from an estate directly to a named beneficiary -- are exempt from this VAT, so an in-family inheritance of real property generally does not trigger the conveyance charge. [5] From July 2025, parties to any real-property conveyance must also obtain a VAT invoice from the DIR and, where a beneficial interest is conveyed, file a declaration within 30 days; failure to file carries a 3% penalty on the consideration. [6]

No capital gains tax. If estate property is subsequently sold by the heir, The Bahamas charges no capital gains tax on any gain realised. [2]

How does probate work for foreign-held assets?

The Bahamian probate framework covers only assets situated in The Bahamas. A Bahamian court has no jurisdiction over property located in other countries. Each jurisdiction where the deceased held assets will apply its own succession law. For a Bahamian resident who also owned a condominium in Florida or a brokerage account at a US firm, the US estate-tax and probate rules apply to those US-situs assets independently of the Bahamian proceedings.

Why is The Bahamas used for succession planning?

The combination of zero estate tax, zero capital gains tax, zero income tax, and a mature trust framework makes The Bahamas one of the world's most established centres for wealth succession planning. Practitioners commonly use three structures:

Bahamian trusts. Governed by the Trustee Act 1998 and the Trusts (Choice of Governing Law) Act 1989, Bahamian trusts can hold assets indefinitely -- the rule against perpetuities was abolished in 2011. [7] No Bahamian income, capital gains, estate, or withholding tax applies to a non-resident trust. The one-time trust duty is only USD 50, and there are no annual government levies. A trust takes three to five business days to establish.

Foundations. The Foundations Act 2004 provides a civil-law-style vehicle familiar to clients from continental Europe and Latin America. Like a trust, a Bahamian foundation faces no estate or income tax at the Bahamian level.

International Business Companies (IBCs). Holding real property through a Bahamian IBC is another common structure. The IBC's Articles of Association bind each member's heirs, personal representatives, and assigns, giving shareholders advance certainty about succession without a full probate proceeding for each generation.

For cross-border families, Bahamian trusts also provide strong foreign-judgment protection: Bahamian courts will not enforce forced-heirship claims arising under another country's law against assets held in a properly constituted Bahamian trust. [7]

What taxes do cross-border heirs still face?

The Bahamas having no estate tax does not extinguish estate-tax obligations in a beneficiary's home country. Two situations arise most frequently:

US citizens and green-card holders. The United States taxes the worldwide estate of every US citizen and lawful permanent resident, regardless of where the decedent lived. A US citizen residing in Nassau with a USD 15 million estate would still owe US federal estate tax on all assets, including Bahamian property, above the applicable unified credit exemption (USD 13.99 million for 2025, subject to possible legislative change after 2025). There is no US-Bahamas estate tax treaty to reduce this obligation. [8]

Non-US-citizen heirs inheriting US-situs assets. Non-resident aliens who inherit or receive US-situs assets (US real estate, shares in US corporations, and certain other assets) may face US estate tax with a much lower exemption of only USD 60,000. Heirs receiving distributions can face IRS transferee-liability claims if estate tax is unpaid. [9]

Cross-border heirs should not assume that the Bahamas' zero-tax environment extends to assets held or sourced elsewhere in their estate.

Territorial nature of Bahamian tax

The Bahamas operates a territorial system: no taxes are levied on income, gains, or transfers arising outside its borders, and even domestic charges (real-property tax, VAT on conveyances) attach to specific Bahamian assets rather than to a person's global wealth. This contrasts with residence-based systems (UK, Germany, France) and citizenship-based systems (US) that follow the taxpayer wherever they go. A foreign national who holds only non-Bahamian assets is not within scope of any Bahamian tax at all, living or dead.

If you are administering a Bahamian estate, navigating a cross-border succession involving US or other foreign assets, or structuring long-term wealth for the next generation, consult a qualified tax professional who is licensed in the relevant jurisdiction. The information on this page is a factual overview based on current law and is not a substitute for professional legal or tax counsel. You can find vetted professionals with Bahamian or cross-border estate experience through the The Bahamas country overview.