You didn't report your family inheritance? There's a chance to avoid tax.

A single day's delay is enough to lose your tax exemption. This strict rule applies to reporting family inheritances to the tax authorities. There's a chance it will be relaxed. The government has announced the possibility of reinstating the reporting deadline. This is part of deregulation.

Exemption from inheritance and gift tax for immediate family

As a reminder, under the Inheritance and Gift Tax Act, immediate family (the so-called zero group) can benefit from tax exemption. According to Article 4a, inheritances for spouses, children, grandchildren, or siblings, among others, can be exempt from tax. If the inheritance value does not exceed PLN 36,120, it does not need to be reported to the tax office. However, when calculating the limit, the value of assets acquired from the same person in the year of the last acquisition and in the five preceding years should be added together.

If the threshold of PLN 36,120 is exceeded, we must report the inheritance to the tax office. We use the SD-Z2 form. We have six months to do so. This period begins on the date the court decision declaring the inheritance becomes final, or on the date of notarial registration of the certificate of inheritance, or on the issuance of the European Certificate of Succession.

An inheritance exceeding PLN 36,120 must be reported to the tax office.

"Many heirs are unaware of this obligation; some forget about it. Sometimes something unexpected happens, such as an illness or accident. The consequences are serious, because instead of an exemption, we end up with a large tax bill. And not everyone has the means to pay it, especially when inheriting real estate," explains Grzegorz Gębka, tax advisor at GTA law firm.

Unfortunately, the deadline for reporting cannot be extended. As the Ministry of Finance emphasizes in its brochure on inheritance settlement, if you are even one day late, the exemption will be forfeited. Even if the delay occurred through no fault of the heir. However, in a response to the Commissioner for Human Rights dated December 4, 2024 (no. DPL1.055.1.2024), the Ministry of Finance wrote: "The sole requirement of reporting acquired assets or property rights within a convenient six-month period seems to be a rather burdensome obligation compared to the benefits received in the form of complete tax exemption regardless of the value of the property acquired free of charge."

However, a chance for change has emerged. "We want to improve the situation for taxpayers and introduce the possibility of reinstating the deadline," the Ministry of Finance writes in a project announcement, which has been added to the government's legislative agenda. The tax office will be able to do so "in unexpected circumstances beyond the taxpayer's control."

When will it be possible to restore the deadline for reporting an inheritance?

"It's good that the Ministry of Finance wants to ease the rules for tax exemption for immediate family members. However, I'm certain that adopting such ambiguous criteria for reinstating the deadline will generate numerous doubts and disputes," says Marek Najman, tax advisor at ATA Tax.

Grzegorz Gębka agrees. He points out that an accident, fire, or illness could be a fortuitous event. "The tax office should reinstate the deadline if the heir was hospitalized for three months. But it's unclear whether they would consider a cold in the last week of the deadline to be an unintentional event," Grzegorz Gębka muses.

– Practice may vary; for one office, a declaration from the heir may be sufficient to restore the deadline, while another will require a medical certificate – adds Marek Najman.

"There will be many unclear situations, for example, whether an heir who suddenly had to travel abroad before the end of six months is justified. As a result, officials will be burdened with more work processing applications for extensions of the deadline , and some disputes will undoubtedly end up in court. Is this really deregulation?" emphasizes Grzegorz Gębka.

The notification must be abolished, it will be a real deregulation

Experts have no doubt that eliminating the obligation to file tax returns would be a real simplification. "In the case of inheritances, this obligation is unnecessary; there's no tax optimization involved," says Marek Najman.

"The consequences of failing to file a declaration are too severe; there's no point in maintaining this requirement," adds Grzegorz Gębka. He points out that the tax office has ample opportunity to audit taxpayers' assets and can easily do without the SD-Z2 inheritance form.

According to the Ministry of Finance's announcement, the tax authorities will also be able to reinstate the deadline for reporting the acquisition of ownership of an individual's business (or a share in it) through inheritance or bequest. This obligation is provided for in Article 4b, Section 1, Item 1 of the Inheritance and Gift Tax Act.