Inheriting shares of companies subject to personal income tax

Lawyer Nguyen Thi Thuy, YouMe Law Firm LLC, replied:

Clause 9, Article 2 of Circular 111/2013/TT-BTC stipulates that income from inheritance is the income that individuals receive according to the will or according to the provisions of the law on inheritance, specifically as follows:

a) For inheritance of securities, including: stocks, shares, bonds, certificates of fund and other securities as prescribed by the Securities Law; shares of individuals in joint stock companies as prescribed by the Enterprise Law.

b) For inheritance as capital in economic organizations and business establishments, including: contributed capital in limited liability companies, cooperatives, joint ventures, business cooperation contracts; capital in private enterprises, business establishments of individuals; capital in associations and funds allowed to be established in accordance with the provisions of law or all business establishments if they are private enterprises or business establishments of individuals.

c) For inheritance of real estate, it includes: land use rights; land use rights with assets attached to land; ownership rights of houses, including future housing; infrastructure and construction works attached to land, including future construction works; land lease rights; water surface lease rights; other income received from inheritance of real estate in any form; deducted from income from inheritance of real estate as instructed in Point d, Clause 1, Article 3 of this Circular.

d) For inheritance of other assets, ownership or use rights must be registered with State management agencies such as: cars; motorbikes, motorbikes; ships, including barges, canoes, trailers, push-ups; boats, including yachts; aircraft; hunting guns, sports guns.

Point d, Clause 1, Article 3 of Circular 111/2013/TT-BTC stipulates the tax-exempt income as follows: Tax-exempt income is income from receiving inheritance and gifts of real estate (including houses and construction works formed in the future according to the provisions of the law on real estate business) between:

- Husband and wife;

- Biological father, biological mother and biological child;

- adoptive father, adoptive mother and adopted child;

- Father-in-law, mother-in-law and daughter-in-law;

- Father-in-law, mother-in-law and son-in-law;

- Grandfather, grandmother and grandchild;

- Grandfather, paternal grandmother and grandchild;

- brothers, sisters, brothers are related;

Thus, inheritance as a share in a joint stock company is subject to personal income tax according to the cited regulations.