Succession

Since 1993, when the Death and Donation Duty Act was repealed, in Malta there is no inheritance tax levied on the transmission of property causa mortis. In view of our Civil Law background, property which may be disposed of by will is subject to forced heirship rules otherwise known as legitim. Legitim is a portion of the property of the deceased which is saved by law to the descendants, and on failure of descendants, to the ascendants of the deceased.

Wills
A will is a legal document signed in the presence of witnesses that states how, subject to the rules of legitim, you wish your possessions, known as your ‘Estate’, to be divided after your death. The Estate is administered by Testamentary Executors who distribute it to the people or organisations named in the will, known as ‘heirs’.

Subject to certain exceptions, anyone who is mentally capable, is not interdicted and is over 18 can make a will.

Why do you need a will?
If you die without a will, then you die intestate. This means that your Estate is divided up according to the rules of Intestacy. These rules vary depending on the individual circumstances.

Points to keep in mind:

• Monetary donations during the lifetime of the deceased are not subject to any taxation. Legitim rules always apply and may bring into play the rules of collation which can affect the amounts that were transferred during the lifetime of the deceased.
• Transfer of shares whether inter vivos or by transmission causa mortis are subject to Duty on Documents and Transfer Tax at the rate of 2% on the value.
• The rate of 5% is however levied on the transfer of shares in an immovable property company.
• Transfer of immovable property whether inter vivos or by transmission causa mortis are subject to Duty on Documents and Transfer Tax at the rate of 5% on the market or transfer value of the immovable property whichever is the higher.

Why Grant Thornton?
Long term personal tax planning is of vital importance to those who do not want to leave their loved ones to face hefty tax bills. We have many experts within the firm who have years of experience and technical knowledge and together we can work to provide you with the solution which best suits your needs.