Leaving a work of art to your heirs is not only a financial decision, it can also be a contribution to the cultural heritage of the Netherlands. Dutch tax law contains a unique provision allowing heirs, under specific conditions, to settle (part of) the Dutch inheritance tax by transferring a work of art to the State, provided that the work is of national cultural or historical importance.
The Art of Legacy
1. The essence of the Dutch facility
Article 67, paragraph 3 of the Dutch Inheritance Tax Act (Successiewet 1956) provides that heirs may obtain remission of Dutch inheritance tax up to 120 % of the appraised value of an eligible artwork or cultural object forming part of the estate.
In other words: if an artwork is valued at €100,000, the Dutch Tax Administration may cancel up to €120,000 of inheritance tax (including interest), as long as the total tax liability is at least that amount.
The objective is twofold: to help heirs meet Dutch inheritance tax liabilities without having to sell family assets; and to preserve important works of art within the Netherlands.
Eligibility is restricted to objects of exceptional cultural or art-historical significance, assessed by an independent advisory committee under the supervision of the Netherlands Cultural Heritage Agency (Rijksdienst voor het Cultureel Erfgoed, RCE).
2. When is an estate subject to Dutch inheritance tax?
This facility can only be used if Dutch inheritance tax (“erfbelasting”) is due. That tax applies to the worldwide estate of any person who is considered resident in the Netherlands at the time of death, as defined in Article 3 of the Dutch Inheritance Tax Act (Successiewet 1956).
Under this article:
- a person of Dutch nationality who has emigrated is deemed to remain resident for ten years after leaving the Netherlands; and
- a person without Dutch nationality who previously lived in the Netherlands is deemed to remain resident for one year after emigration.
Accordingly, only the estate of a deceased person who is resident or deemed resident in the Netherlands falls within the scope of Dutch inheritance tax and may benefit from this “payment-in-kind” facility. If the deceased has not lived in the Netherlands for more than these periods — ten years for Dutch nationals, one year for others the estate is outside the Dutch taxing right. In that case, the facility cannot be used and is, quite frankly, useless. This distinction matters: the rule is not a cultural-donation programme open to non-residents, but a specifically Dutch inheritance-tax mechanism designed to settle Dutch tax liabilities through the transfer of culturally significant works of art.
3. How the procedure works
During lifetime, owners of valuable art may request an assessment of whether a work might qualify. Preparation is key: ensure that the work will form part of the estate at death, obtain a professional valuation, and where possible secure interest from a Dutch museum willing to accept or display it.
After death, once the final inheritance-tax assessment has been issued, heirs have eight weeks to submit a written request to the Dutch Tax Administration to pay (part of) the tax through the transfer of the artwork. After review by the advisory committee, ownership passes to the State and the tax debt is remitted.
4. Art ownership and Box 3
Art held for personal enjoyment is excluded from Box 3 (the Dutch tax on savings and investments). Only art held for investment purposes falls within Box 3 or may be taxed as income. Art for pleasure lies outside Box 3; art for profit lies within it. This often makes art ownership fiscally neutral during life, yet potentially useful in the inheritance-tax remission scheme upon death.
5. Purchasing art during lifetime
Because only objects forming part of the estate at death can be used for this facility, individuals may deliberately acquire qualifying art during their lifetime. Such a purchase can serve both personal enjoyment and long-term planning: the owner benefits from the work while alive, and after death the heirs may use it to settle Dutch inheritance tax turning a private acquisition into a public legacy.
6. No government “budget”
This arrangement is not a government purchase fund. The Dutch State does not buy art under this scheme; it accepts art in kind as payment of Dutch inheritance tax. Each case is assessed individually, and approved works are typically placed in the national collection and loaned to a museum for display.
7. Why this facility matters
It provides liquidity relief for families facing Dutch inheritance tax, helps preserve the nation’s cultural heritage, and allows testators to combine fiscal prudence with cultural generosity. In essence, it embodies the art of legacy fulfilling fiscal duty while leaving beauty behind.