The Taxation of Gratuitous Transfers: Inheritance and Gift Tax in Poland

The Taxation of Gratuitous Transfers: Inheritance and Gift Tax in Poland

2026-02-26

INTRODUCTION

The taxation of gratuitous transfers—whether effected through testamentary succession, inter vivos gift, or analogous mechanisms of non-reciprocal wealth transmission—constitutes one of the most enduring and philosophically contested domains of public finance law. Within the systematic taxonomy of fiscal instruments, the inheritance and gift tax occupies a distinctive position as a direct levy imposed upon the accession of wealth by natural or juridical persons, targeting the augmentation of the transferee’s patrimony arising from an uncompensated transfer of economic value. The structural design of such wealth transfer tax levies admits of two principal architectural variants: the estate tax model, which imposes liability upon the aggregate decedent’s estate prior to distribution, and the inheritance tax model, which assesses individual beneficiaries according to their respective shares of the transferred wealth. Understanding these distinctions is foundational to tax law practice and strategic advisory in cross-border wealth planning.

 

I. HISTORICAL GENESIS AND EVOLUTION

A. Classical Antiquity: The Roman Vicesima Hereditatium

The fiscal appropriation of inherited wealth finds its earliest systematic expression in the Roman Empire, where Emperor Augustus, in 6 A.D., instituted the vicesima hereditatium—a levy of one-twentieth, or five percent, of the value of testamentary successions exceeding a prescribed threshold. The proceeds were earmarked for the aerarium militare, a dedicated treasury established to finance the retirement stipends of legionary veterans, capitalized with 170 million sesterces of Augustus’s own funds. Notably, the vicesima exempted transfers to the decedent’s nearest blood relations—including grandparents, parents, children, grandchildren, and siblings—thereby establishing a differentiation principle based upon the degree of consanguinity that has proved remarkably durable, persisting in substantially recognizable form across two millennia of legislative practice. Evidence suggests that a de minimis exemption may have been introduced only during Trajan’s reign rather than forming part of Augustus’s original enactment; the kinship-based preferential regime nonetheless rendered the Augustan innovation a genuinely sophisticated fiscal instrument—one that anticipated, in embryonic form, the graduated and relationship-sensitive structures characteristic of modern inheritance tax systems.

 

B. Medieval Feudal Incidents

The dissolution of centralized Roman fiscal administration during the medieval period did not extinguish the practice of levying charges upon the transmission of wealth at death; rather, it transformed the practice into a constellation of feudal incidents. In England, the relevium emerged as a customary payment owed by an heir to the feudal overlord as a condition of entry into the decedent’s tenancy—a charge conceptually analogous to a modern succession duty, albeit grounded in tenurial rather than fiscal logic. In the continental lands, the mortuarium served a related but functionally distinct purpose: rather than constituting a succession payment by an heir to a lord in the manner of the English relief, the mortuarium was more closely analogous to the heriot—a death duty typically associated with serfdom and peasant obligations to the seigneurial authority, representing a compensatory exaction upon the vassal’s death rather than a succession fee payable by the heir. These feudal exactions, while lacking the systematic character of a modern tax, reflected a persistent intuition that the intergenerational transmission of wealth constitutes a proper occasion for the assertion of a superior claim by the political community or its representative authority.

 

C. The Early Modern and Revolutionary Transformation

The emergence of centralized nation-states in the seventeenth and eighteenth centuries, attended by the escalating fiscal demands of standing armies and expanding bureaucracies, engendered the development of recognizably modern inheritance tax regimes. It was, however, the French Revolution that effected the most consequential conceptual transformation. The revolutionaries reconceived the inheritance tax not merely as a revenue instrument, but as a mechanism of social engineering: a tool for dismantling the hereditary concentration of wealth and advancing the republican ideals of égalité. The revolutionary period produced numerous succession reforms between 1789 and 1804, including the abolition of primogeniture in 1790 and the radical Law of Nivôse Year II (January 1794) imposing strict equality among heirs. While the differentiation of tax rates and allowances according to the relationship between the deceased and the beneficiary became an established feature of the droits de mutation par décès, this dual-graduated model—progressive both in quantum and in relational proximity—emerged through an evolving legislative process rather than a single enactment, and subsequently established the architectural template adopted, with local variations, throughout continental Europe and beyond.

II. THEORETICAL FOUNDATIONS AND NORMATIVE JUSTIFICATIONS

The normative legitimacy of taxing gratuitous transfers has been the subject of sustained philosophical and economic contestation, yielding a plurality of competing justificatory frameworks, none of which commands universal assent. These theoretical foundations directly inform contemporary tax advisory practice and disputes with tax authorities.

 

A. The Ability-to-Pay Rationale

The most venerable justification proceeds from the ability-to-pay principle, a foundational tenet of progressive fiscal theory. On this account, the gratuitous acquisition of wealth constitutes an accession to economic capacity that is indistinguishable, from the standpoint of the recipient’s enhanced command over resources, from income derived through labor or investment. The transferee’s augmented ability to satisfy wants and discharge obligations furnishes a sufficient normative predicate for the imposition of a tax liability proportionate to the magnitude of the accretion.

 

B. The Equal Opportunity Thesis

A second line of justification, elaborated with particular force by John Stuart Mill and subsequently refined by twentieth-century welfare economists, grounds the inheritance tax in the imperative of equality of opportunity. Mill believed the government should implement inheritance taxes to promote the diffusion rather than the concentration of wealth, proposing that every person should be free to receive a limited amount through gift or inheritance, with amounts above this limit subject to taxation. Proponents of this view contend that substantial disparities in inherited wealth perpetuate and entrench intergenerational inequality, conferring upon the beneficiaries of large estates advantages—in education, social capital, and economic security—that are unrelated to individual merit or effort. The inheritance tax, on this reasoning, operates as a corrective mechanism moderating the transmission of unearned privilege and thereby preserving the conditions necessary for a genuinely meritocratic social order.

 

C. The State Participation Doctrine

A third justificatory strand conceives of the inheritance tax as a form of social recoupment—an acknowledgment that the accumulation of private wealth is, in significant measure, contingent upon the legal infrastructure, security apparatus, and economic institutions maintained by the state. The decedent’s capacity to amass and preserve a transferable estate depended upon the enforcement of property rights, the stability of contractual relations, and the provision of public goods that enabled productive economic activity. The inheritance tax, on this view, represents the community’s legitimate claim to a proportionate share of wealth whose creation it facilitated.

 

D. The Natural Rights Objection

Against these affirmative justifications, a formidable body of criticism, rooted in natural rights theory and libertarian political philosophy, contends that the inheritance tax constitutes an impermissible infringement upon the rights of both the transferor and the transferee. The most frequently pressed objection characterizes the levy as a form of double taxation: the assets comprising the estate have already borne the full burden of personal income tax, corporate income tax, and other fiscal exactions during the decedent’s lifetime, and their subjection to a further charge upon transmission represents an unjustifiable confiscatory imposition. While this critique has exerted considerable influence upon public discourse and legislative design, it is subject to the rejoinder that the inheritance tax falls not upon the same taxpayer but upon a distinct juridical person—the beneficiary—at the moment of a new and independent accession to wealth.

 

III. COMPARATIVE ANALYSIS OF CONTEMPORARY REGIMES

A comparative survey of contemporary inheritance and gift tax systems reveals substantial heterogeneity in structural design, rate calibration, and policy orientation, reflecting divergent national traditions regarding the proper relationship between the state, the family, and intergenerational wealth. Navigating these divergences requires specialized legal counsel and comprehensive strategic legal advisory.

 

A. The United States: A Bifurcated Federal-State Architecture

The American system employs a distinctive dual-layered architecture combining the federal estate tax—levied upon the gross estate of the decedent prior to distribution under Subtitle B of the Internal Revenue Code—with state-level inheritance taxes imposed upon individual beneficiaries in a subset of jurisdictions. The federal regime provides in 2024 a unified credit equivalent to an exemption of $13.61 million per decedent ($27.22 million for married couples), with the consequence that the tax effectively reaches only approximately 0.2% of decedent estates. The concentration of liability among the wealthiest estates imparts to the federal estate tax a markedly progressive character, though critics observe that the extraordinary breadth of the exemption has rendered the tax a de facto levy upon only the most substantial concentrations of dynastic wealth. The scheduled 2025 sunset of the enhanced exemption injects additional uncertainty into estate planning for high-net-worth families.

 

B. The United Kingdom: Inheritance Tax at a Flat Rate

The United Kingdom levies inheritance tax at a uniform rate of forty percent upon the value of the estate exceeding a nil-rate band of £325,000—frozen since 2009 and extended to at least 2030. The regime incorporates a transferability mechanism permitting the surviving spouse to utilize any unused portion of the predeceasing spouse’s nil-rate band, effectively doubling the exemption for married couples. A reduced rate of thirty-six percent applies where the decedent has bequeathed at least ten percent of the net estate to qualifying charitable organizations. The British system, while structurally simpler than its continental counterparts, has attracted sustained criticism for the perceived inadequacy of the nil-rate band relative to prevailing property values, particularly in London and the South East, where the threshold captures estates of comparatively modest scale.

 

C. Continental European Systems: France and Germany

The continental European tradition, exemplified by the French and German regimes, features elaborate rate structures that differentiate liability according to both the quantum of the transfer and the degree of familial proximity between the transferor and the transferee. In France, marginal rates ascend to forty-five percent for transfers to lineal descendants exceeding the applicable abatement, while transfers to unrelated persons attract rates reaching sixty percent. The French Cour des Comptes has confirmed this structure of differentiated allowances and rates according to the relationship to the deceased. The German system, governed by the Erbschaftsteuergesetz, imposes rates ranging from seven to fifty percent across three taxpayer classes determined by the closeness of the familial relationship: Class I for close family, Class II for more distant relatives, and Class III for non-relatives. Both systems provide substantial exemptions for transfers of qualifying business assets—in France through the Dutreil Pact mechanism, in Germany under §§ 13a and 13b ErbStG—reflecting a considered legislative judgment that the preservation of family enterprises warrants preferential fiscal treatment. The analogous role is served in the Polish system by family foundations as instruments of intergenerational succession.

 

IV. THE ABOLITIONIST TREND AND THE COUNTER-MOVEMENT

The past two decades have witnessed a notable, albeit not universal, trend toward the reduction or outright abolition of inheritance taxation in several advanced economies. Sweden’s parliament, the Riksdag, voted unanimously in 2004 to repeal the inheritance and gift tax; originally scheduled for 1 January 2005, the effective date was brought forward to 17 December 2004 in the aftermath of the Asian tsunami disaster that killed many Swedish citizens abroad. Austria abolished its inheritance and gift tax effective 1 August 2008, after the Constitutional Court found the existing law unconstitutional due to unequal treatment of financial assets and real estate. Norway completed the abolitionist trajectory in 2014. The rationale adduced in each instance rested upon a convergence of practical and normative considerations: the relatively modest fiscal yield of the tax, its disproportionately high administrative and compliance costs, its perceived adverse effects upon family-owned enterprises, and the competitive pressures exerted by neighboring jurisdictions offering more favorable treatment of intergenerational wealth transfers.

Simultaneously, however, a counter-movement of considerable intellectual force has emerged, animated by mounting empirical evidence of widening wealth inequality and the impending intergenerational transfer of unprecedented magnitude as the baby-boom cohort’s accumulated assets pass to succeeding generations. Proposals for the introduction or strengthening of wealth transfer taxes have gained traction in academic and policy discourse, exemplified by the wealth tax proposals advanced in the United States and the periodic resurfacing of harmonization initiatives within the European Union. Jurisdictions that have retained their inheritance tax regimes have, in general, pursued a strategy of selective liberalization: raising exemption thresholds, expanding preferential treatment for family businesses, and broadening the scope of reliefs available to close family members.

 

V. INTERNATIONAL ESTATE PLANNING AND ANTI-AVOIDANCE MEASURES

The disparity among national inheritance tax regimes has given rise to a sophisticated practice of international estate planning, whereby high-net-worth families exploit jurisdictional differentials to optimize the fiscal burden attendant upon intergenerational wealth transfers. The instrumentarium available to practitioners encompasses a wide array of legal vehicles: common law trusts, continental family foundations, and corporate holding structures, each offering distinctive advantages in terms of asset protection, governance flexibility, and fiscal efficiency. The selection of a favorable situs for the administration of family wealth, the temporal disaggregation of transfers to maximize the utilization of periodic exemptions, and the strategic deployment of asset classes enjoying preferential treatment in particular jurisdictions constitute the principal techniques of contemporary cross-border estate planning. Among the instruments deployed in practice are private investment insurance policies, fiduciary services, and foreign bank accounts in jurisdictions such as Switzerland and Liechtenstein.

The proliferation of these planning strategies has, in turn, prompted an intensification of multilateral anti-avoidance efforts. The Common Reporting Standard, developed under the auspices of the OECD, has established a comprehensive framework for the automatic exchange of financial account information among participating jurisdictions—by 2025, operating across over 120 jurisdictions—substantially curtailing the capacity to conceal offshore assets. The system of international tax information exchange also encompasses new digital asset reporting standards under CARF/DAC8. Within the European Union, the Directive on Administrative Cooperation, and in particular its sixth iteration, DAC6 (Council Directive (EU) 2018/822), imposes mandatory disclosure obligations upon intermediaries facilitating cross-border arrangements bearing specified hallmarks of potentially aggressive tax planning—including generic markers linked to the main benefit test, specific cross-border arrangements, and arrangements involving automatic exchange mechanisms. These measures operate within the broader framework of general anti-avoidance rules (GAAR) and the increasingly assertive stance of tax authorities toward aggressive tax optimization. While not eliminating the scope for legitimate tax optimization, they have materially constricted the domain of opaque and noncompliant offshore structuring.

 

VI. CONTEMPORARY CHALLENGES AND EMERGENT COMPLEXITIES

The administration of inheritance and gift taxation in the contemporary environment confronts a series of challenges of unprecedented complexity, driven by the globalization of wealth, the digitization of assets, and the demographic transformation of advanced societies.

The valuation of complex financial instruments, closely held business interests, and intangible assets has emerged as a particularly acute difficulty for revenue authorities. Where assets are not traded on liquid public markets, the determination of fair market value requires the exercise of substantial professional judgment and the application of sophisticated valuation methodologies—discounted cash flow analyses, comparable transaction approaches, and option pricing models—each susceptible to significant margins of uncertainty and manipulation. The emergence of crypto-assets and the tokenization of real-world assets have introduced an entirely novel category of wealth that poses formidable challenges of identification, tracing, and valuation—matters now subject to regulation under DAC8—in many instances outpacing the capacity of existing legal and administrative frameworks. Cryptocurrency transactions generate additional risks in the sphere of anti-money laundering compliance.

The demographic transition underway in the advanced economies—characterized by population aging and the progressive transfer of the baby-boom generation’s historically unprecedented accumulation of wealth—is poised to magnify the fiscal and distributional significance of inheritance taxation. The sheer magnitude of the anticipated intergenerational transfer lends renewed urgency to the policy debate, even as the political salience of inheritance tax reform generates countervailing pressures toward further liberalization and exemption expansion. Professional tax audit and due diligence have become indispensable tools for managing succession risk in this environment.

 

VII. EUROPEAN HARMONIZATION: PROSPECTS AND CONSTRAINTS

Within the European Union, the harmonization of inheritance taxation remains a largely unrealized aspiration, constrained by the intimate connection between succession taxation and Member State fiscal sovereignty, as well as by deeply rooted cultural divergences in the normative valuation of family, patrimony, and intergenerational solidarity. The jurisprudence of the Court of Justice of the European Union has, however, effected a measure of negative harmonization by progressively invalidating national provisions that discriminate against non-residents or impose disparate treatment upon cross-border successions—as in Commission v. Spain (2014) and related cases addressing restrictions on the free movement of capital arising from discriminatory inheritance tax provisions—thereby vindicating the free movement of capital guaranteed by Article 63 of the Treaty on the Functioning of the European Union. This jurisprudence carries significant implications for international private law governing succession matters.

Affirmative proposals for a European wealth tax or a harmonized framework for inheritance taxation have encountered persistent resistance from Member States unwilling to cede competence over so politically sensitive an instrument of fiscal policy. The unanimity requirement applicable to tax matters under Article 115 TFEU constitutes a formidable procedural obstacle, rendering legislative progress contingent upon the convergence of twenty-seven national interests—a condition that, in the current political environment, appears unlikely to be satisfied in the near term. The result is a landscape of continuing fragmentation, in which cross-border disparities and mismatches persist, generating both planning opportunities and compliance burdens for taxpayers with multinational asset portfolios. Navigating this complex environment requires the support of professional tax advisory services and comprehensive corporate legal services.

 

CONCLUSION

The taxation of gratuitous transfers occupies a singular position at the intersection of fiscal policy, distributive justice, and the cultural valuation of family and patrimony. From the Augustan vicesima to the contemporary debates surrounding wealth inequality and dynastic concentration, the inheritance tax has served as both a practical instrument of revenue mobilization and a symbolic arena for the articulation of competing visions of the just society. The comparative analysis undertaken herein reveals that no single model has achieved a stable equilibrium between the legitimate objectives of revenue generation, redistributive fairness, administrative feasibility, and economic neutrality. Rather, the field is characterized by a dynamic and ongoing process of adjustment, in which jurisdictions continuously recalibrate their regimes in response to shifting economic conditions, demographic pressures, and normative commitments.

The challenges posed by asset globalization, digital wealth, and demographic transition ensure that the taxation of gratuitous transfers will remain a subject of acute policy relevance and scholarly interest for the foreseeable future. The trajectory of reform will be shaped by the capacity of national and supranational institutions to develop frameworks adequate to the complexity of modern wealth—frameworks that reconcile the imperatives of fiscal adequacy and distributive equity with due respect for the autonomy of families, the vitality of enterprise, and the mobility of capital in an interconnected global economy. In this context, professional strategic advisory and tax planning constitute not a luxury but a necessity for any entity managing cross-border wealth.

 

Gratuitous Transfers: Inheritance and Gift Tax – Further Reading

Returning a Gift to Avoid Tax