Category: Wealth Structures

Germany is, simultaneously, the most complex and most rewarding Private Placement Life Insurance market in Europe. The 12-year half-income rule is real, it is material — and it is routinely overlooked by advisers who consider Germany too complex to touch. That calculation is wrong. Here is what you need to know. The Headline Benefit — And Why It Matters Germany imposes a flat Abgeltungsteuer of 25% (approximately 26.4% including the Solidarity Surcharge) on investment income: dividends, interest, and capital gains on securities held directly. For a client at Germany’s top marginal income tax rate of approximately 47.5%, the Abgeltungsteuer is already a meaningful advantage over direct income taxation. But PPLI offers something better. Under §20 Abs. 1 Nr. 6 of

South Africa’s estate duty framework has a clean structural parallel with the UK’s inheritance tax problem: a life insurance policy paid to the deceased’s estate is included in the dutiable estate; a policy paid directly to a named beneficiary is generally excluded. The solution is structural — not a trust, but a beneficiary designation. South African trust law is mature and well-developed, adding a further planning layer for UHNWI clients. GLOBAL ESTATE PLANNING SERIES Overview — The Global LandscapePart 2 — EU Civil Law: France, Germany, Spain and BelgiumPart 3 — The UAE and GCC: Succession Without Estate TaxPart 4 — Japan and Asia: The World’s Highest Inheritance Tax RatePart 5 — The United States: Estate Tax, the ILIT, and

The US federal estate tax applies at 40% on the taxable estate above the applicable exemption — currently at historically high levels but subject to a scheduled reduction. Life insurance owned by the deceased is included in the taxable estate unless held in an Irrevocable Life Insurance Trust. PPLI, as KPMG has noted, is “a potential option to increase one’s after-tax investment returns while providing for transition of assets upon death.” The US is the most sophisticated market globally for the intersection of PPLI and estate planning. GLOBAL ESTATE PLANNING SERIES Overview — The Global LandscapePart 2 — EU Civil Law: France, Germany, Spain and BelgiumPart 3 — The UAE and GCC: Succession Without Estate TaxPart 4 — Japan and

Japan’s 55% maximum inheritance tax rate is the highest in the developed world. The Japanese legislature built a specific life insurance exemption into the Inheritance Tax Act — ¥5 million per statutory heir — as a deliberate policy tool. For UHNWI clients with Japanese connections, life insurance is not peripheral to estate planning. It is central to it. GLOBAL ESTATE PLANNING SERIESOverview — The Global LandscapePart 2 — EU Civil Law: France, Germany, Spain and BelgiumPart 3 — The UAE and GCC: Succession Without Estate TaxPart 4 — Japan and Asia: The World’s Highest Inheritance Tax Rate (You are here)Part 5 — The United States: Estate Tax, the ILIT, and Where PPLI FitsPart 6 — South Africa: Estate Duty and

The UAE imposes no inheritance tax, no estate duty, and no capital gains tax on death. The estate planning problem in the Gulf is not tax — it is who receives the assets. For the approximately 88.5% of the UAE population who are non-citizen expatriates, and for Muslim citizens subject to Sharia succession rules, life insurance is one of the most powerful tools available. Getting the structure right requires understanding what Sharia inheritance law actually mandates, and how DIFC, ADGM, and offshore structures interact with it. GLOBAL ESTATE PLANNING SERIESOverview — The Global LandscapePart 2 — EU Civil Law: France, Germany, Spain and BelgiumPart 3 — The UAE and GCC: Succession Without Estate Tax (You are here)Part 4 — Japan

In the UK, a trust removes a life insurance policy from the estate and eliminates its Inheritance Tax exposure. In France, Germany, Spain, and Belgium — the four largest continental European UHNWI markets — the trust either does not exist in local law or is explicitly ignored for tax purposes. This piece examines what that means in practice and what tools actually work in each jurisdiction. GLOBAL ESTATE PLANNING SERIESOverview — The Global LandscapePart 2 — EU Civil Law: France, Germany, Spain and Belgium (You are here)Part 3 — The UAE and GCC: Succession Without Estate TaxPart 4 — Japan and Asia: The World’s Highest Inheritance Tax RatePart 5 — The United States: Estate Tax, the ILIT, and Where PPLI

The UK series on this blog established how a trust structure removes a life insurance policy from an estate and neutralises its inheritance tax exposure. That analysis is country-specific. Across 44 jurisdictions tracked by EY’s Worldwide Estate and Inheritance Tax Guide, the problem — and the solution — looks markedly different. This piece maps the global landscape and introduces the dedicated country series that follows. GLOBAL ESTATE PLANNING SERIESOverview — The Global Landscape (You are here)Part 2 — EU Civil Law: France, Germany, Spain and BelgiumPart 3 — The UAE and GCC: Succession Without Estate TaxPart 4 — Japan and Asia: The World’s Highest Inheritance Tax RatePart 5 — The United States: Estate Tax, the ILIT, and Where PPLI FitsPart