How the Curacao Inheritance tax changed in 2018
In 2018 several changes were made to the Curaçao Inheritance Tax Ordinance (hereinafter referred to as: ‘’ITO’’). In this article, the most important changes are highlighted.
- Introduction of the term ‘life partner’
One of the amendments to the inheritance tax legislation is the introduction of the term ‘life partner’. For the purposes of the ITO a 'life partner' is treated the same as a ‘spouse’. The ITO defines the term ‘life partner’ as follows: "an adult who is, during a certain period, registered at the same address and cohabitates in a common household for a prolonged period of time, together with the adult donor or testator and are living together as if they are married.’’ There is a common household for a prolonged period of time when life partners agree to mutually care for each other.
However, in the situation that it is no longer possible for two persons to be registered at the same address due to admission to a nursing or care home because of medical reasons or old age of one of them, they still will be treated as ‘life partners’.
A person can only have one ‘life partner’ and for relatives by blood or marriage it’s not possible to be life partners, unless they are married.
- Increase of the exempted amounts
The exempted amounts in the ITO have increased substantially. If the receiver is an heir or legetary:
- the exempted amount is NAf 80.000 (used to be NAf 4.000) for relatives by blood or marriage in the descending line, parents and parents-in-law;
- the exempted amount is NAf 240.000 (used to be NAf 12.000) for to the surviving spouse or life partner;
- the exempted amount is NAf 8.000 (used to be NAf 400) in all other cases.
If received by way of a gift:
- the exempted amount is NAf 20.000 per year (used to be NAf 1.000) for the spouse, life partner and relatives by blood or marriage in the descending line, parents and parents-in-law;
- the exempted amount is NAf 8.000 per year (used to be NAf 400), in all other cases.
Gifts of movable property intended for personal use of the beneficiary, are exempt from gift tax up to a value of NAf 10.000 (used to be NAf 500) for relatives by blood and marriage in the descending line, parents and parents-in-law. The exempted amount is NAf 2.000 in all other cases (used to be NAf 100).
There are five different tariff groups to which some adjustments have been made. Each tariff group used to be comprised of eleven different brackets. As a result of the amendments, the number of brackets has been reduced to three per tariff group. The lowest and the highest rate of each tariff group have not changed. This results in the following table.
| Acquisition as | Relatives by blood or marriage in the descending line or the surviving spouse or life partner | Relatives by blood or marriage in the ascending line | Brothers(-in-law) or sisters(-in-law) | Brother’s – or sister’s children or grandchildren | Other cases |
| Up to Naf 50.000 | 2% | 3% | 4% | 6% | 8% |
| Between Naf 50.001 – Naf 250.000 | 4% | 6% | 8% | 12% | 16% |
| Naf 250.001 and higher | 6% | 9% | 12% | 18% | 24% |
