Inheritance and Estate Tax in Denmark

Denmark's estate and inheritance tax framework rests on a single statute -- the Boafgiftsloven (Estate Duty and Inheritance Tax Act, consolidated as LBK nr 47 af 12/01/2015 with subsequent amendments) -- administered by the Skattestyrelsen (Danish Tax Agency). The tax falls on the recipient, not the estate itself, and the rate depends entirely on how closely the heir is related to the deceased.

A clear, annually indexed tax-free threshold sits beneath the charge: only the amount above that floor is taxable. For deaths occurring in 2025, the threshold (bundfradrag) is DKK 346,000. For deaths in 2026, it rose to DKK 392,300, reflecting annual indexation. The threshold applies once per estate, not once per heir.

What rate applies to children, parents, and other close relatives?

Heirs who fall inside the "close-family" circle defined by the Boafgiftsloven pay 15% on the portion of their inheritance that exceeds the bundfradrag. The close-family circle includes: direct descendants (children, grandchildren), ascendants (parents, grandparents), stepchildren of the deceased, spouses of the deceased's children, and a cohabiting partner who shared the deceased's household for at least the final two years of life. For 2025, a child inheriting DKK 700,000 would pay 15% on DKK 354,000 (DKK 700,000 minus DKK 346,000), which equals DKK 53,100. For 2026, the same estate would have a taxable base of DKK 307,700 and generate DKK 46,155 in boafgift.

Who faces the supplementary 25% duty and how does the combined rate work?

Heirs outside the close-family circle -- siblings, nephews, nieces, cousins, friends, and unrelated beneficiaries -- face both the standard 15% boafgift and an additional 25% supplementary duty called tillægsboafgift under section 7 of the Boafgiftsloven. The supplementary charge applies to the remaining value after the 15% has been deducted, not to the original inheritance figure. The arithmetic runs as follows: 15% is taken first, leaving 85 kroner of every 100 kroner of taxable inheritance. The supplementary 25% then applies to that 85, adding another 21.25 kroner. The effective combined rate is therefore 36.25%.

The supplementary charge is heir-specific. An estate split between a child and a sibling attracts 15% on the child's share and 36.25% on the sibling's share -- calculated separately for each recipient.

Is there a reduced rate for transferring a family business?

Yes. Legislation enacted on 8 April 2025 (Bill L 123) reduced the boafgift rate for qualifying business succession transfers from 15% to 10%, effective retroactively from 1 January 2025. For a business to qualify, the transfer must meet the criteria for tax succession under Danish tax law: the transferor must have owned the business for at least one year, the recipient must be a close family member, and the business must be actively operated rather than a passive holding vehicle. From 1 January 2027, the definition of eligible recipients expands to include siblings.

The same 2025 legislation also established a statutory right to use a standardized schematic valuation model when calculating boafgift for family-owned companies, giving families greater certainty on the assessed value of the business being transferred. Active rental businesses may now qualify for succession treatment provided the family owns more than 50% and manages operations directly.

How does gift tax (gaveafgift) work for close family?

Denmark taxes lifetime gifts using the same 15% rate structure, but only above an annual exemption. For 2025, close relatives -- children, grandchildren, parents, cohabiting partners, and foster children -- may receive gifts of up to DKK 76,900 per year from each donor without any gaveafgift liability. The 2026 exemption is DKK 80,600. A separate, smaller exemption of DKK 26,900 (2025) or DKK 28,200 (2026) applies to sons-in-law and daughters-in-law.

Spouses may give each other unlimited gifts free of tax. The annual exemption is per donor, per recipient, per calendar year -- meaning a grandchild can receive up to DKK 76,900 from each grandparent separately without any portion being taxable. Gifts above the annual exemption to close relatives are taxed at 15%. Gifts to individuals outside the close-family circle do not attract gaveafgift at a flat rate; instead, recipients resident in Denmark are required to report the value as personal income.

What changes in 2027?

The Danish Parliament agreed in 2025 to extend the 15% close-family rate to siblings from 1 January 2027. Under current rules, a sibling inheriting from a deceased who has children is subject to the full 36.25% combined rate. From 2027, that same sibling will pay only 15%, bringing siblings onto equal footing with children and parents for estate tax purposes. The change applies to deaths occurring on or after 1 January 2027 and does not affect inheritances settled before that date.

A qualified tax professional registered in Denmark can help heirs and executors navigate filing deadlines, contested valuations, and business succession eligibility -- see the Denmark country overview for practitioners and jurisdiction context. Tax rules change; always verify current thresholds and rates with a qualified professional before taking any action in connection with an estate.