Inheritance and Gift Tax Issues with Joint Bank Accounts

by | Dec 6, 2023

Joint bank accounts – Inheritance tax and gift tax issues

Based on law 4916/2022, the exemption from Greek inheritance tax that applied for deposits maintained in joint bank accounts held in Greece was extended also to joint bank accounts held abroad, with the exclusion of non-cooperative tax jurisdictions. The exemption covers accounts in cash deposits and all kinds of securities.

In order for the exemption to apply, the contract with the foreign bank should include a clause providing that after the death of any of the co-beneficiaries of the joint account the deposits are automatically transferred to the other living co-beneficiaries, i.e. without the operation of inheritance rules. It is reminded that the same clause needs to be included in the contract with a Greek bank.

The law provision refers explicitly only to the exemption from inheritance tax and not from gift tax. Therefore, Greek inheritance tax will not be triggered if the co-beneficiary of the joint-bank account withdraws money after the death of the other co-beneficiary, regardless of the subsequent use of that money e.g. for the purchase of real estate or other assets in Greece or abroad.

However, there is a potential risk that the Greek tax authorities may consider, upon a tax audit, that Greek gift tax may potentially be triggered upon either of the following occasions:

  • a) Upon the withdrawal of money from the joint bank account during the other co-beneficiary’s lifetime, in excess of any amounts deposited in the joint bank account by the co-beneficiary withdrawing the money.
  • b) After the death of the other co-beneficiary, upon the future use of said money (again in excess of any amounts deposited in the joint bank account by the co-beneficiary withdrawing the money) e.g. for the purchase of real estate or other assets either in Greece or abroad.

The above risk does not derive explicitly from the law but from tax audit practice or case law.

Greek gift tax may be relevant for foreigners, as it is imposed, among other cases, to any movable property located abroad of a foreign national that is donated to a Greek or foreign national who has his residence in Greece.

It should be highlighted that as of late 2021, a tax-exempt threshold (one-off) of Euros 800,000 applies to the parental gift or the gift to specific categories of close relatives of any asset, as well as the parental gift or the gift of cash to the above persons which is carried out by money transfer through financial institutions. Any excess amount is subject to 10% gift tax.

Natalia Skoulidou specializes in Tax Law and has signification professional experience of 15 years in a broad range of tax areas, with a particular expertise on Greek and EU VAT issues, indirect tax issues, international tax issues and corporate tax and restructuring. She and her team at Iason Skouzos Tax Law are happy to help you with assist you with any legal matters regarding tax or otherwise in Greece and around the world.

Natalia Skoulidou

Natalia Skoulidou

Iason Skouzos Taxlaw
joint bank account

Theodoros I. Skouzos

Iason Skouzos Taxlaw