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 SERIES
Overview — The Global Landscape (You are here)
Part 2 — EU Civil Law: France, Germany, Spain and Belgium
Part 3 — The UAE and GCC: Succession Without Estate Tax
Part 4 — Japan and Asia: The World’s Highest Inheritance Tax Rate
Part 5 — The United States: Estate Tax, the ILIT, and Where PPLI Fits
Part 6 — South Africa: Estate Duty and the Named Beneficiary Rule
THREE DISTINCT PROBLEMS
The interaction between life insurance payouts and estate or inheritance taxes takes three structurally different forms across global jurisdictions. Understanding which problem applies in a given country determines what the solution looks like.
Type A — Trust-compatible estate/inheritance tax jurisdictions
Countries with estate or inheritance tax where common-law trusts are recognised and can be used to remove the life policy from the estate. The UK model. The trust is both the problem identifier and the solution. This group includes the UK, Ireland, the Netherlands, and — with some qualification — Denmark and parts of Scandinavia. Most offshore PPLI carriers operate from these or adjacent jurisdictions.
Type B — Civil law jurisdictions where trusts are not recognised (or treated as transparent)
Countries with estate or inheritance tax where the Anglo-Saxon trust either does not exist in local law or is treated by the tax authority as if the settlor still owns the assets. This covers most of continental Europe: France, Germany, Spain, Belgium. The solution here is not a trust but a foundation (Stiftung, fondation), a specially structured life policy with named beneficiary designations, or an EU-portable product like Luxembourg assurance vie or PPLI. This is the most commercially significant group for the PPLI market.
Type C — No estate/inheritance tax, but succession distribution risk
Countries with no estate or inheritance tax where the planning challenge is not tax but who receives the assets — typically through Sharia forced heirship rules (UAE, Saudi Arabia, Qatar) or intestacy laws that override the deceased’s wishes. Life insurance with named beneficiary designations becomes a bypass mechanism rather than a tax tool.
| Country / Region | Max Rate | Life Insurance Treatment | Type |
|---|---|---|---|
| UK | 40% | Included in estate unless held in trust | A |
| France | 60% | Assurance vie carved out (€152,500/beneficiary tax-free pre-70) | B |
| Germany | 50% | Death benefit explicitly taxable under ErbStG | B |
| Spain | 88% | Life insurance to non-policyholder beneficiary subject to ISD; trusts ignored for tax | B |
| Belgium | 80% | Policy proceeds taxable on death; complex regional rules | B |
| Netherlands | 40% | Named beneficiary policy generally outside estate; trust recognition limited | B |
| UAE | None | No estate tax; Sharia forced heirship without planning | C |
| Saudi Arabia / GCC | None | No estate tax; Sharia succession applies | C |
| Japan | 55% | ¥5M × no. of statutory heirs exempt; remainder taxable | A |
| South Korea | 50% | Exemptions exist up to threshold; progressive rates | A |
| USA | 40% | Included in estate unless held in Irrevocable Life Insurance Trust (ILIT) | A |
| South Africa | 25% | Named beneficiary policy excluded from dutiable estate (s.3(3)(a) Estate Duty Act) | A |
| Australia | None | No inheritance tax; CGT and income tax considerations apply | — |
| Singapore / HK | None | No estate/inheritance tax | — |
| Italy | 8% | Low rates; named beneficiary policies generally outside estate | B |
| Portugal | 10%* | Stamp duty; life insurance explicitly exempt | B |
* Portugal applies stamp duty rather than inheritance tax; close family members are generally exempt. Source: EY Worldwide Estate and Inheritance Tax Guide 2024; PwC Worldwide Tax Summaries.
WHY THE CIVIL LAW GROUP IS THE MOST COMMERCIALLY SIGNIFICANT
The Type B group — France, Germany, Spain, Belgium — represents the largest concentration of European UHNWI wealth outside the UK. It is also the group where the conventional Anglo-Saxon trust response to the estate-and-life-insurance problem does not apply directly, because civil law systems either do not recognise the trust as a legal concept or treat trust assets as remaining with the settlor for tax purposes.
This is where Luxembourg and Irish PPLI structures — with their EU passporting and portable beneficiary designation frameworks — become strategically important. It is also why the assurance vie in France, and the Stiftung (foundation) in Germany and Austria, have developed as product-specific or structural alternatives to the trust. The PPLI market exists, in no small part, as a response to the Type B problem.
WHAT THE SERIES COVERS
Each subsequent piece takes one jurisdiction or region, verifies the applicable tax rules against primary and Big Four sources, explains the interaction with life insurance products, and identifies the planning tools that work in that context. The series is specifically written for advisers and UHNWI clients who engage with offshore PPLI structures across multiple jurisdictions.
The UK analysis — covering trust structures, IHT mechanics, and the April 2025 long-term residence rule changes — is covered in our existing UK three-part series. The jurisdiction profiles for PPLI carrier selection are covered in our jurisdiction series. This global estate planning series bridges the two.
SOURCES AND FURTHER READING
- EY, Worldwide Estate and Inheritance Tax Guide 2024 — 44-jurisdiction survey, free to download at ey.com
- EY, Worldwide Estate and Inheritance Tax Guide 2025 — updated edition available at ey.com
- PwC, Worldwide Tax Summaries — country-by-country individual tax data at taxsummaries.pwc.com
- KPMG, Individual Income Tax and Social Security Rate Survey — kpmg.com
- Tax Foundation, Estate, Inheritance, and Gift Taxes in Europe 2025 — taxfoundation.org
- OECD, Inheritance Taxation in OECD Countries — oecd.org