Inheritance law in Monaco for UK tax residents
2026-04-20

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Inheritance law in Monaco for UK tax residents

When a UK tax resident inherits property or wealth connected to Monaco, two fundamentally different tax systems apply:

Monaco, which taxes inheritance based on the location of the asset;
The United Kingdom, which taxes inheritance primarily based on the domicile of the deceased.

Understanding how these systems interact is essential to avoid unexpected inheritance tax exposure. The information below is based exclusively on official Monaco and UK government sources.

How inheritance tax works in Monaco

Monaco applies inheritance tax only to assets physically located within the Principality, regardless of:

the nationality of the deceased,
the residence of the deceased,
the residence of the heir.

This principle is commonly referred to as the situs rule.

Monaco Inheritance Tax Rates

Relationship	Monaco Inheritance Tax
Parents ↔ Children	0%
Spouses	0%
Siblings	8%
Uncles / Aunts ↔ Nephews / Nieces	10%
Other relatives	13%
Unrelated persons	16%

Succession Options Under Monaco Law

Under Monaco law, heirs may choose between the following options:

Pure and simple acceptance: the heir accepts both assets and liabilities;
Acceptance under benefit of inventory: liability is limited to the net value of the estate;
Renunciation: the heir formally declines the inheritance.

These options provide important legal protection, particularly where potential debts may exist.

UK Inheritance Tax: How the UK Treats Monaco Assets

Unlike Monaco, the UK does not tax inheritance based on where assets are located.

Instead, UK inheritance tax is determined primarily by the domicile of the deceased.

In practical terms:

If the deceased was UK-domiciled, the UK taxes their worldwide estate, including Monaco assets.
If the deceased was not UK-domiciled, the UK generally taxes only UK-situated assets, meaning Monaco assets usually fall outside the UK inheritance tax net.

It is important to note that domicile is not the same as residence. It refers to long-term connections, origin, intention and tax history. A person may live in Monaco for many years and still remain UK-domiciled for inheritance tax purposes.

When a UK Tax Resident Inherits from Someone Who Lived in Monaco

This is one of the most common situations involving UK residents with Monaco connections.

Key principle: the UK looks at the domicile of the deceased, not the residence of the heir.

If the Deceased Had Become Non-UK-Domiciled (e.g. Monaco-Domiciled)

Monaco taxes the Monaco-situated assets;
the UK does not tax those foreign assets;
the UK heir receives the Monaco inheritance free of UK inheritance tax.

If the Deceased Remained UK-Domiciled

Monaco taxes the Monaco-situated assets;
the UK taxes the worldwide estate;
the UK may grant a credit for Monaco inheritance tax paid, reducing the UK tax liability.

Given that Monaco inheritance tax can reach 16% and UK inheritance tax is 40%, a precise calculation is required to determine the final tax burden.

When a UK-Domiciled Person Owns Assets in Monaco

If an individual dies while still UK-domiciled:

the UK taxes all assets worldwide, including those in Monaco;
Monaco also taxes the assets located in Monaco;
the UK may provide unilateral relief by crediting the Monaco tax already paid.

This relief may reduce, but does not always eliminate, double taxation.

No UK–Monaco Inheritance Tax Treaty

There is no bilateral inheritance tax treaty between the United Kingdom and Monaco.

As a result:

the UK cannot rely on treaty protection to eliminate double taxation;
it applies its unilateral double taxation relief rules instead;
Monaco applies its inheritance tax independently of UK rules.

Gifts

Monaco does not levy tax on lifetime gifts.

The UK, however, applies specific rules depending on:

the domicile of the donor,
the seven-year rule,
whether the gift qualifies as a Potentially Exempt Transfer (PET).

Lifetime transfers therefore require careful planning in a UK–Monaco context.

Sources

Monaco – Official Government Sources

Government of Monaco, Inheritance Tax (Droits de succession), Mon Service Public – Direction des Services Fiscaux
Government of Monaco, Acceptance of a Succession Subject to Inventory or Renunciation, Mon Service Public – General Registry

United Kingdom – Official Government Sources

HM Government (UK), Inheritance Tax: What It Is Paid On, HM Revenue & Customs (HMRC)
HM Government (UK), Inheritance Tax Double Taxation Relief, HM Revenue & Customs (HMRC)

Contact Monaco Properties for tailored cross-border inheritance advice, strategic estate planning and access to premium real estate expertise.

LEGAL DISCLAIMER

This article is provided for informational purposes only and does not constitute legal, tax or investment advice.

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