Understanding the tax consequences of a spouse's or partner's death

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The tax consequences and the formalities that must be carried out in the event of a spouse's or partner's death depend on whether the taxpayers are residents or non-residents.

Resident married taxpayers and, under certain conditions, non-resident married taxpayers are taxed jointly in tax class 2 (classe d'impôt 2) on all of their income earned during the marriage. For the tax years following the year of their spouse's death, widowed taxpayers file an income tax return and report their own income. However, widowed taxpayers remain in tax class 2 for 3 years following their spouse's death.

Partners may not be taxed jointly for the tax year in which the partnership ends. The surviving partner, whether resident or non-resident, becomes taxable individually as of the year in which the partner dies.

Who is concerned

All taxpayers, whether resident or non-resident, whose spouse or partner has died.

How to proceed

Tax consequences of a spouse's or partner's death for resident taxpayers

Married taxpayers are taxed jointly during their marriage and for the year in which the spouse dies.

For the tax years following the year of their spouse's death, widowed taxpayers file an income tax return and report their own income. However, widowed taxpayers remain in tax class 2 for 3 years following their spouse's death.

Consequences with regard to the tax card (employees or retirees)

For married taxpayers

In the year of the marriage's dissolution by reason of death, the widowed taxpayer (whether employed in Luxembourg or receiving a pension that is taxable in Luxembourg) is not required to carry out any particular formalities with respect to tax cards that have already been issued.

In the event of the death of an employee of a Luxembourg company, the beneficiary of the 3-month goodwill period—an indemnity corresponding to the current month's salary and that of the 3 following months—must apply for an additional tax card in order to receive payment from the competent RTS office.

The surviving spouse in employment remains in tax class 2 for 3 years following the death of their spouse. During that period, tax class 2 is automatically listed on their tax card when it is issued.

Following the transitional period, a widowed taxpayer with or without children enters tax class 1A.

For taxpayers living in partnerships

The death of a partner does not require carrying out any specific formalities with respect to the tax card.

Consequences with regard to the income tax return

For married taxpayers

For the year in which the marriage is dissolved by reason of death, the widowed taxpayer is taxed jointly with the deceased. A joint tax return must be filed and the household's entire income reported.

In the year following their spouse's death, and under certain conditions, widowed taxpayers file an income tax return reporting their own income.

For taxpayers living in partnerships

The surviving partner may not apply for joint taxation for the year in which the partnership ends by reason of death. Under certain conditions, surviving partners may file a tax return and declare their own income.

Consequences with regard to the annual-adjustment method

For married taxpayers

For the year in which the marriage is dissolved by reason of death, a widowed taxpayer who does not satisfy the conditions for filing an income tax return may, under certain circumstances, file a request to to have their tax withholdings adjusted by means of the annual adjustment method. The widowed taxpayer files one joint annual adjustment.

In the year following the marriage's dissolution, a widowed taxpayer who does not file an income tax return may, under certain circumstances, file a request for a tax adjustment using the annual-adjustment method.

For taxpayers living in partnerships

For the year in which the partnership ends, a surviving partner who does not file an income tax return may, under certain circumstances, file an individual request for a tax adjustment using the annual-adjustment method.

Tax consequences of a spouse's or partner's death for non-resident taxpayers

Consequences with regard to the tax card (employees or retirees)

During their marriage, non-resident married taxpayers who are taxed jointly must file a single, joint tax return.

For the tax years following the year of their spouse's death, widowed taxpayers, under certain circumstances, file an income tax return and report their own income. However, widowed taxpayers remain in tax class 2 for 3 years following their spouse's death.

For married taxpayers

In the year of the marriage's dissolution by reason of death, the widowed taxpayer (whether employed in Luxembourg or receiving a pension that is taxable in Luxembourg) is not required to carry out any particular formalities with respect to tax cards that have already been issued.

In the event of the death of an employee of a Luxembourg company, the beneficiary of the 3-month goodwill period—an indemnity corresponding to the current month's salary and that of the 3 following months—must apply for an additional tax card in order to receive payment.

The beneficiary of the 3-month goodwill period who is an employee in Luxembourg sends a death certificate and a duly completed copy of Form 164 NR/EM to the non-resident Luxembourg RTS office.

The surviving spouse in employment remains in tax class 2 for 3 years following the death of their spouse. During that period, tax class 2 is automatically listed on their tax card when it is issued.

Following the transitional period, a widowed taxpayer with or without children enters tax class 1A.

For taxpayers living in partnerships

The death of a partner does not require carrying out any specific formalities with respect to the tax card.

Consequences with regard to the income tax return

For married taxpayers

Where both taxpayers receive professional income that is taxable in Luxembourg—i.e., commercial profit, agricultural and forestry profit, earnings from self-employment, income from paid employment, income from pensions or annuities—they remain jointly taxable for the year in which the marriage is dissolved by reason of death. The widowed taxpayer therefore files a joint tax return.

If only one of the taxpayers receives professional income that is taxable in Luxembourg, under certain circumstances, the widowed taxpayer must file an income tax return reporting only income from Luxembourg sources.

In the year following their spouse's death, and under certain conditions, widowed taxpayers file an income tax return reporting their own income.

For taxpayers living in partnerships

The surviving partner may not apply for joint taxation for the year in which the partnership ends by reason of death. Under certain conditions, surviving partners may file a tax return and declare their own income.

Treatment of non-resident taxpayers as resident taxpayers

For the year in which the marriage is dissolved by reason of death, non-resident taxpayers who opt to be treated, for tax purposes, as resident taxpayers are taxed jointly and must file a joint tax return.

For the year following dissolution of the marriage, under certain circumstances, a widowed taxpayer who receives taxable professional income in Luxembourg may opt to be treated as a resident for tax purposes and file a tax return.

Consequences with regard to the annual-adjustment method

For married taxpayers

For the year in which the marriage is dissolved, taxpayers who do not satisfy the conditions for filing an income tax return may, under certain circumstances, file a request for an adjustment of their tax withholdings using the annual-adjustment method. The taxpayers file one joint annual adjustment.

For the year following the dissolution of the marriage, a widowed taxpayer who is an employee in Luxembourg or receives a pension that is taxable in Luxembourg and who does not file an income tax return may, under certain circumstances, file a request for a tax adjustment using the individual annual-adjustment method.

For taxpayers living in partnerships

For the year in which the partnership ends, the surviving partner who does not file an income tax return may, under certain circumstances, file a request for a tax adjustment using the annual-adjustment method.

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