Life Sucks & €45.000 Inheritance Tax

Sometimes you come across a (sad) story in the media that get’s your attention. The reasons for the attention? Drama is usually part of it, as is money. Add some taxes in the mix and you have a great story for a crowdfunding campaign. Wait, what? Let’s review the story about Life Sucks & €45.000 Inheritance Tax.

Life Sucks

The story that got my attention is that about Milo and his mother Linda. They already lost their father and husband back in 2014. On top of that, Linda was diagnosed with breast cancer back in 2012, which resurfaced this year. Unfortunately it has spread throughout her body and she likely won’t make it to 2021.

In short, Milo will likely be an orphan by the end of this year. Life can be really unfair to some people, especially to this 13 year old Milo. Losing your parents at such a young age sucks. But it get’s worse… (trying to make it sound extra dramatic here, is it working?)

€45.000 Inheritance Tax

Milo stands to inherit the “family fortune” and will be required to pay inheritance tax over said family fortune. The total amount of that, according to the news article, is €45.000. Now, as many other people, Milo & Linda appear to be house rich and cash poor. So, in order for Milo to be able to pay that inheritance tax, he would have to sell the house.

Life Sucks & €45.000 Inheritance Tax
Life Sucks & €45.000 Inheritance Tax: Sell the house?

The last wish from Linda is for her son to be able to stay in the family home (with her new boyfriend). But since there is no cash, a family friend initiated a crowdfunding campaign to raise enough money for him to stay. This was apparently a big success as about €55.000 was raised already at time of writing.


Obviously, as a money minded personal finance nut, I wanted to know how much money this Milo is actually inheriting and what the home could be worth! Aren’t you? Now, we don’t know all the financial details of this story, so let’s make some educated guesses here:

  • There is clearly not enough cash to pay the €45.000 inheritance tax (this number came from a notary public, according to the article). So let’s assume that there is a emergency buffer and funds for a funeral. Say €20.000 in total (€10.000 emergency fund and €10.000 for the funeral).
  • The inheritance tax system and rates can be found here (Dutch only).
  • The value of the home is based on the WOZ value (not market value, which is commonly 10-20% higher) for inheritance purposes
  • It’s assumed that Milo already has received an inheritance from his dad. Taxes on this amount would have already been paid by Mom Linda, and the amount could have grown by 6% over the past 6 years (depending on what was arranged in a will and testament / with the tax department). This amount is unknown. But let’s conservatively assume it’s primarily consisting of the current family home and no interest was charged.
  • Also unknown is if Linda and her late husband had life insurance on their mortgage. However, since many people do, it’s not unthinkable that there was no longer a mortgage remaining on the property (or only a small amount left).
  • Milo is the sole heir of the inheritance and mom’s new boyfriend get’s zip.
Life Sucks & €45.000 Inheritance Tax: making some calculations!
Life Sucks & €45.000 Inheritance Tax: making some calculations!

The calculation

How much would the inheritance be if Milo needs to pay €45.000 and is the sole heir to the inheritance?

  • The first €20.946 is free of taxation.
  • The next €126.723 is taxed at 10% (tax rate for children) = €12.723 in taxes
  • Everything else is taxed at 20% (also rate for children). In short €45.000 – €12.723 = €32.277 / 0.2 = €161.385 taxable inheritance.
  • The total inheritance is thus about €309.000 (thus about €20.000 cash and €289.000 in net property value (WOZ minus any mortgage debt, if still applicable)).

Done, right? Probably not. There might actually be a part of the inheritance that is already exempt from taxation (as taxes would have already been paid). When his dad past away, Milo would have inherited half of his estate (the other would have gone to Linda). As Linda is the parent and legal guardian of Milo, she would have had to pay this inheritance tax and would have full control over Milo’s inheritance from his dad (until he is at least 18 years of age).

In short, Linda would have likely owned about 3/4th of the property and Milo the other 1/4th (on paper anyways). Based on this, the net property value is likely more around the €385.000 mark. Market value these days might actually be more around the €425-450K mark. That’s quite the inheritance for a 13 year old. Albeit he would rather still have both his parents, I assume.

Sad conclusion with light at the end of the tunnel

Milo’s life is developing rather unfairly and I hope he will be able to deal with all the sadness he had to (and likely will) suffer over the (future) years. However, by the time he hit’s 18, he will get full control over all funds and property. By that time he should be in a position to quickly become financially independent. I hope that he finds the FIRE community at that time and makes the right financial decisions!

Obviously, the above is only an educated guess as we don’t have enough details to get the complete picture. That being said, it’s probably a decent shot in the dark as to the family fortune.

A few notes to consider, it’s good to be prepared in life (and death). A good will is very important. Also make sure you are not too cash strapped (and property rich), an emergency fund might come in handy at the time you don’t think you need it. Estate planning, especially if you already have a decent amount of money, might be key to preserve wealth for future generations.

Life can be great, but it sucks on occasion. Be (financially) ready for when it does! Not everyone will get his/her own crowdfunding campaign!


  1. Interesting (and sad) story.
    Would there be support for the child and his guardian (the mother’s boyfriend) from the state?
    Would they be able to mortgage the property in the child’s name in order to pay the tax?

    1. Should have read the linked article. I see a mortgage not possible. Can the tax bill be deferred until he’s 18?

      I see the wezenuitkering is about eur 600 per month on top of kinderbijslag (I think?). Should be possible to sort it out.

      1. You generally get 9 months to get your stuff together. In special circumstances (perhaps if the house does not sell, or in situations with funds not being available), you might be able to get some reprieve. But generally, you just have to pay up.

        Not sure how much you can arrange as a 13 year old, the guardian will all have to sort that out is my guess. Depending on what he (in this case) is permitted to do and how much funds he himself has to his disposal, there might be limited options available.

      2. Could the mother gift a share of the house to her boyfriend. The boyfriend could then mortgage against that share in order to pay the son’s inheritance tax, when the time comes.

      3. She could, but that would be subject to a gifting tax (“Schenkbelasting”), is not going to help much here. The best thing probably was to get married and have him inherit everything within the deduction limits. But I guess that was not one of the options that was on the table.

    1. Thanks!

      Fair? Within the current system it’s fair indeed. The system does not care if you are 13, 30 or 70 when this happens (read, you get an inheritance). It’s unfortunate that it happens to him at his young age and there is not enough cash to pay for it. But this happens a lot! That is why you need a good an emergency fund or other setup where you can avoid such situations. Shit happens, and you should prepare yourself for such an event.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.