Iceland (IS)
Iceland is a North Atlantic volcanic island nation of extraordinary natural beauty — home to geysers, glaciers, lava fields, midnight sun, the Northern Lights, and some of the world's most active volcanoes.
Estate & Inheritance in Iceland
Wills, intestacy, inheritance tax, and cross-border estate planning for expats.
Iceland's estate and inheritance law (erfðaréttur) is governed primarily by the Inheritance Act (erfðalög) and the Probate Act (búskiptalög). The law provides for forced heirship rights (skyldulífshluti) protecting close family members from total disinheritance. Iceland participates in the EU Succession Regulation (EU 650/2012) via the EEA Agreement, which determines which country's law applies to cross-border estates and allows EU citizens to choose the law of their country of nationality to govern their estate. All estate matters in Iceland are handled through Sýslumaður (the district administrative authority) or the courts. Inheritance tax was abolished in Iceland in 1992 — there is no inheritance tax (erfðafjárskattur) in Iceland, making it one of the more favourable jurisdictions for estate matters.
Intestacy — What Happens Without a Will
If a person dies without a valid will (testamentlaus), Icelandic succession law distributes the estate in the following order: (1) spouse and/or registered partner — receives 50% of the marital estate as their own share plus inheritance rights; (2) descendants (children, grandchildren) in equal shares; (3) if no descendants: parents and siblings; (4) if no parents or siblings: more distant relatives; (5) if no heirs: the estate passes to the Icelandic state. The surviving spouse has the right to stay in the family home (undivided estate — óskipt búseta) during their lifetime even when children are heirs, subject to conditions.
Types of Valid Will
Holograph Will
EiginhandarskjalA will entirely handwritten and signed by the testator. No witnesses required if entirely handwritten. Must clearly state the testator's intent to dispose of estate.
Valid in Iceland if entirely handwritten and signed. Less reliable than witnessed will if legibility or authenticity is questioned.
Simple but higher risk of being challenged. Only recommended for simple estates and as a temporary measure. Store in a safe place known to your executor.
Witnessed Will (Formal Will)
VitundarvottfestingarskjalA will signed by the testator in the presence of two disinterested witnesses, who also sign. The witnesses confirm the testator's capacity and voluntary intent. This is the most reliable form.
Fully valid and most robust form of will in Iceland. Harder to challenge.
Recommended for all but the simplest estates. Witnesses cannot be beneficiaries under the will. The will should be stored with Sýslumaður or with a trusted person/institution.
Mutual Will (Hjónavilji)
Hjónavitundarskjal / Gagnkvæmt erfðaskjalA single will made jointly by a married couple or registered partners, leaving assets to each other and then to named beneficiaries on the second death.
Valid under Icelandic law. More complex to revoke after first spouse has died.
Common for married couples who want simple mutual succession. Revocability after first death is limited — discuss implications with a lawyer before creating.
Forced Heirship
Iceland has forced heirship (skyldulífshluti) provisions that protect close family members from complete disinheritance. Descendants (children) and a surviving spouse are entitled to a mandatory portion (lögerfð): children collectively are entitled to at least two-thirds (2/3) of the net estate, regardless of the will's terms. This means a testator cannot freely bequeath their entire estate to charity or a third party if they have children. The forced heirship rules apply to the estate under Icelandic law — for non-Icelandic assets, the law of the relevant country applies.
EU Succession Regulation (Brussels IV)
Iceland is an EEA member but the EU Succession Regulation (EU 650/2012 / Brussels IV) was NOT incorporated into the EEA Agreement and does not apply in Iceland. Icelandic courts apply Icelandic private international law, not Brussels IV, to determine which country's law governs a cross-border estate. For EU citizens living in Iceland: EU member state courts will apply Brussels IV to EU-situated assets, and may apply the law of the EU member state of habitual residence (Iceland) or allow a choice-of-law election to the EU nationality country — but Icelandic courts are not bound by this framework. Expats with assets in both Iceland and EU countries should obtain legal advice in each country separately. A European Certificate of Succession issued by an EU member state court will not automatically be recognised in Iceland without a separate court recognition process.
Inheritance Tax
Iceland has NO inheritance tax (erfðafjárskattur). Inheritance tax was abolished in Iceland in 1992. Beneficiaries receive inherited assets without any inheritance tax liability. This is a significant advantage compared to many European countries.
| Relationship | Tax-Free Allowance | Tax Rate (above allowance) |
|---|---|---|
| All beneficiaries | No limit | 0% — no inheritance tax in Iceland |
The absence of inheritance tax makes Iceland uniquely favourable among high-income countries. Gifts made inter vivos (while alive) may have different tax treatment — consult Skatturinn for the tax treatment of large gifts. Gifts to close family members may still be subject to documentation requirements.
Cross-Border & Multi-Country Estates
For estates involving assets in multiple countries: the EU Succession Regulation (applicable via EEA) determines which country's law applies to the succession as a whole. Separate legal processes may be needed in each country where assets are located. Double-taxation treaties may be relevant if other countries impose inheritance taxes on Icelandic residents' assets. Engage a lawyer (lögmaður) experienced in international succession for any estate with foreign elements.
Certificate of Inheritance
An Erfðavottorð (Certificate of Inheritance) is issued by Sýslumaður upon successful completion of the estate administration process. This document confirms the heirs and their entitlements and is required to transfer ownership of assets (property, bank accounts, shares) to beneficiaries. Applications for Sýslumaður probate are made at local syslumannsembætti offices or online via island.is.
Will Registration
Iceland does not have a national central will registry as of 2026. Wills should be stored with the estate's executor, with a trusted family member, with Sýslumaður (regional administrative authority), or with the solicitor who prepared it. Inform your executor and a trusted person of the will's location. Some legal firms offer will storage services.
Living Will & Healthcare Power of Attorney
Iceland recognises advance directives (fyrirmæli um líknarmeðferð) regarding medical treatment. These can specify preferences for end-of-life medical care. A health care proxy (heilbrigðisumboðsmaður) can be designated. Advance directives are registered at Embætti landlæknis (Directorate of Health). These are separate from a financial/estate will.
Useful Links
Estate & Inheritance
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