Do overseas inheritance attract additional inheritance tax (Mauritius)?
The passing of a loved one is an unfortunate time to have to untangle a complicated legal knot. But inheritance can be tricky, especially in an expat-friendly country like Mauritius.
If you are a foreigner residing in or outside of Mauritius, or if the decedent is a foreigner residing in Mauritius, you may be wondering if your inheritance is subject to inheritance tax in Mauritius, or perhaps in some other country.
Here is what you need to know about inheritance tax in Mauritius, from a variety of expat perspectives.
Does Mauritius have an inheritance tax?
Mauritius has no direct inheritance tax.
Therefore, if a citizen or permanent resident of Mauritius wills real estate or personal (movable) property to another citizen or permanent resident of Mauritius no inheritance tax liability will arise at the time of their passing.
This even applies to personal (moveable) property located in other countries due to the legal principle of lex domicilii (law of the domicile of the deceased). If the decedent is a permanent resident of Mauritius, that is the jurisdiction that applies, even to personal property located out of the country and whether or not the decedent is a Mauritian citizen.
However, in the case of foreign real estate, the principle of lex rei sitae (the law where the property is located). If a citizen or permanent resident of Mauritius wills foreign real estate to another citizen or permanent resident of Mauritius, it will be subject to any inheritance tax laws that apply to the country where the real property is located.
Will I be subject to inheritance tax if I inherit real estate located in Mauritius?
In most cases, no. Mauritius applies the legal principle of lex rei sitae (the law where the property is located) to inheritance of real property. If the real estate is located in Mauritius, it is subject to Mauritian inheritance law and no inheritance tax applies.
Even if neither the inheritor nor the decedent are residents of Mauritius, Mauritian inheritance law applies to the inheritance of Mauritian real estate due to lex rei sitae—the real estate is in Mauritius, so Mauritian inheritance law applies and no inheritance tax will be assessed.
The exception is if either the inheritor or the decedent is a resident of France. France and Mauritius enjoy a special long-standing relationship, and French citizens are eligible for a Platinum Visa for long-term residency in Mauritius. If either you or the decedent maintain their fiscal domicile in France, Mauritian real estate may be subject to the French inheritance tax regime.
Will I be subject to inheritance tax if I inherit foreign real estate while living in Mauritius?
The legal principle of lex rei sitae (the law where the property is located) applies to Mauritian inheritance law. Therefore, if you reside in Mauritius and inherit real estate in another country, that inheritance will be subject to the tax regime of the country wherein the real estate is located. This applies whether or not you or the decedent are a Mauritian citizen and/or permanent resident.
Will I be subject to inheritance tax if I inherit personal property located in Mauritius?
If you are a resident of Mauritius …
It depends on where the decedent resides. The legal principle of lex domicilii (law of the domicile of the deceased) applies to inherited moveable property in Mauritius. If the property is in Mauritius but the decedent resides elsewhere, that personal property will be subject to the inheritance tax regime of the country where the decedent resided. This is true even if the decedent or the inheritor are Mauritian citizens.
If you are a non-resident of Mauritius
If a non-resident of Mauritius, even a Mauritian citizen, inherits personal property located in Mauritius, the legal principle of lex domicilii (law of the domicile of the deceased) still applies. The property is subject to inheritance tax in the country of the decedent’s residence, even if the personal property is located in Mauritius and even if you or the decedent are Mauritian citizens.
If the decedent is a resident of Mauritius …
The legal principle of lex domicilii (law of the domicile of the deceased) applies to inherited moveable property in Mauritius. Since the decedent resides in Mauritius, which has no inheritance tax, no inheritance tax will apply in this circumstance. This rule applies whether or not the decedent residing in Mauritius is a Mauritian citizen.
If the decedent is a non-resident of Mauritius …
If the decedent is a non-resident of Mauritius—even if the resident is a Mauritian citizen—the legal principle of lex domicilii (law of the domicile of the deceased) applies to inherited personal property in Mauritius. Since the decedent resided in another country, the inheritance laws and taxes of that country of residence apply, even if the decedent is a Mauritian citizen and even if the property is located in Mauritius.
If you or the decedent are residents of France …
If either the inheritor or the decedent maintains permanent fiscal residence in France, the French inheritance tax regime may apply, even if the property is located in Mauritius and even if one or both of you is a Mauritian citizen.
Will I be subject to inheritance tax if I inherit personal property while living in Mauritius?
If you are a resident of Mauritius …
Again, the critical factor is the residency of the decedent, due to the legal principle of lex domicilii (law of the domicile of the deceased). Even if you are living in Mauritius, and even if you are a citizen of Mauritius, the inheritance tax regime of the decedent’s last legal residence will apply to their personal (moveable) property.
If the decedent is a resident of Mauritius …
Due to the legal principle of lex domicilii (law of the domicile of the deceased), Mauritian inheritance law will apply to the personal property of Mauritian residents. Therefore, if the decedent is a resident of Mauritius, you will not owe inheritance tax on their willed personal (moveable) property. This applies whether or not the decedent is a Mauritian citizen.
If you or the decedent are residents of France …
Due to the legal principle of lex domicilii (law of the domicile of the deceased), Mauritian inheritance law will apply to the personal property of Mauritian residents. Therefore, if the decedent is a resident of Mauritius, you will not owe inheritance tax on their willed personal (moveable) property. This applies whether or not the decedent is a Mauritian citizen.
Forced Heirship in Mauritius
Mauritius is a forced heirship state. If real or personal property is subject to Mauritian inheritance law, it will not face inheritance tax. However, the law may supersede the written wishes of the decedent. The state may distribute a portion of the property to the decedent’s statutory heirs, regardless of what the decedent stipulated in the will.
Conclusion
Mauritius itself has no inheritance tax. Understanding principles of lex rei sitae (the law where the property is located) and lex domicilii (law of the domicile of the deceased) will help you understand what inheritance tax regime you will face if you or the decedent are a citizen and/or permanent resident of Mauritius.
Extra special care in estate planning should be taken if either you or the testator (signer of the will) reside in France.
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