Effective 1 October 2026, Lithuania implemented amendments to the Law on Inheritance Tax (Lietuvos Respublikos paveldėjimo mokesčio įstatymas) that fundamentally alter the valuation and taxation of inherited investment portfolios. The changes, adopted by the Seimas on 15 July 2026 (No. XIV‑1234), introduce a market‑value‑at‑date‑of‑death principle for listed securities, replacing the previous average‑price‑over‑six‑months method. For unlisted shares and fund units, a certified valuer’s report is now mandatory. The tax‑free threshold remains at €150,000 per heir, but the progressive rates (5%–10%) now apply to the net portfolio value after deducting documented acquisition costs and related expenses. Non‑resident heirs face a flat 10% rate with no threshold, aligned with the EU Parent‑Subsidiary Directive provisions. The State Tax Inspectorate (VMI) has issued Guidance Note VMI‑2026‑45 detailing reporting deadlines: heirs must file an inheritance tax return within six months of the date of death, with payment due within three months of the tax assessment notice. Failure to comply triggers daily penalties of 0.03% of the outstanding amount.
Key Takeaways
- Market Valuation Shift: Listed securities are valued at the closing price on the date of death, potentially increasing taxable values for portfolios held during bull markets; heirs should obtain official exchange certificates promptly.
- Mandatory Valuation for Unlisted Assets: Unquoted shares, private equity fund units, and alternative investments require an independent valuation by a VMI‑approved expert, adding cost and time to the estate settlement process.
- Cross‑Border Planning Implications: Non‑resident beneficiaries lose the €150,000 exemption and face a flat 10% rate; double tax treaty relief may be available but requires proactive certificate of residence submission to VMI before the filing deadline.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement