Key Takeaways
- Bermuda imposes no inheritance or estate tax, but estate stamp duty functions as its equivalent charge on death.
- Estate stamp duty applies to Bermuda property in a deceased's estate, with the charge assessed on the affidavit of value.
- Spouses, charities, and the primary family homestead may qualify for exemptions or deductions that reduce the duty owed.
- Foreign assets, lifetime gifts, and tax assurance certificates affect how non-residents plan their estates and limit exposure.
Inheritance & Estate Tax in Bermuda: An Introduction
Bermuda levies no inheritance tax, no estate tax, and no capital transfer tax. What stands in their place is stamp duty, charged on the value of "Bermuda property" held in a deceased's estate under the Stamp Duties Act 1976. The charge applies to anyone whose estate includes Bermuda-situated assets, regardless of nationality, residence, or domicile.
This article explains how that stamp duty works on death, what falls inside and outside the charge, the rate bands, the available exemptions, and the planning options open to a foreign owner of Bermuda assets. It is written for non-resident investors, business owners, and their advisers who hold or are considering holding property, currency, or shares connected to the island. Official guidance on the process is published by the Government of Bermuda.
No Inheritance or Estate Tax in Bermuda: Confirmation and Legal Basis
There is no direct tax on inheritance in Bermuda. The jurisdiction also imposes no income tax, no profits tax, no withholding tax, no capital gains tax, and no wealth tax.
The single charge that touches a deceased's estate is stamp duty. It becomes payable on the affidavit of value that supports an application to the Supreme Court for a grant of probate or letters of administration.
The governing statute is the Stamp Duties Act 1976. It names the instruments that attract duty, sets out valuation and adjudication methods, fixes the amounts payable, states the time limits for stamping, and lists the exemptions.
For internationally owned structures, the practical effect is even lighter. Under the Stamp Duties (International Businesses Relief) Act 1990, instruments to which an international business is a party fall outside the charge, and exemptions exist for instruments dealing with foreign-currency assets, so duty has minimal impact on the international private client.
No Bermuda income, capital gains, gift, inheritance, estate, or other tax is imposed on Bermuda trusts.
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Estate Stamp Duty: Bermuda's Functional Equivalent of a Death Tax
The functional substitute for a death tax is stamp duty assessed on estate filing documents, principally the affidavit of value. This document is submitted alongside the application to the court following death and serves, in effect, as the estate tax return.
When a person dies, the estate representative applies to the Supreme Court for a Grant of Probate where there is a will, or a Grant of Letters of Administration where there is none. Duty is charged on the net dutiable estate value declared in the affidavit.
The executors or administrators pay the duty out of the estate itself. It is calculated on the portion of the net estate exceeding the exemption amount in force at the date of death.
One timing point matters for planning. The affidavit of value allows 90 days from execution, or from its arrival in Bermuda, before stamping is required.
Scope of the Charge: What Counts as "Bermuda Property" in a Deceased's Estate
Duty attaches only to "Bermuda property". In broad terms this means Bermuda dollar-denominated assets and assets situated on the island.
The category captures the following:
- Real estate located in Bermuda
- Bank accounts denominated in Bermuda dollars
- Shares in local Bermuda companies
- Other personal property situated in Bermuda
A notable exclusion changes the analysis for most foreign-owned structures. Shares in a Bermuda-incorporated exempted company are treated as non-Bermuda property and fall outside the charge entirely.
Valuation works on a net, equity basis. For Bermuda real estate, duty is assessed only on the deceased's equity, meaning market value less secured debt.
The net estate calculation forms part of the affidavit of value: gross Bermuda assets at the date of death, less the deductions and exemptions allowed under Part IX of the Act. Nationality, residence, and domicile are irrelevant; what counts is whether a Bermuda grant is required and what Bermuda property the estate holds.
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Rates and Thresholds: How Estate Stamp Duty Is Assessed on the Affidavit of Value
The rate schedule confirmed by the Government applies to deaths occurring after 31 March 1992. Duty is charged ad valorem, so each band of value carries its own rate rather than a single flat rate applied to the whole estate.
The first BM$100,000 of net estate value passes free of duty. Higher bands attract progressively larger rates, reaching a ceiling of 20%.
| Net dutiable Bermuda estate value | Rate |
|---|---|
| Up to BM$100,000 | 0% |
| BM$100,001 – BM$200,000 | 5% |
| BM$200,001 – BM$1,000,000 | 10% |
| BM$1,000,001 – BM$2,000,000 | 15% |
| Over BM$2,000,000 | 20% |
Market value drives the assessment. Where Bermuda real property carries secured debt, that debt reduces the equity and therefore the duty.
A simplified route exists for modest estates. If the Bermuda estate consists only of personal property with a gross value of no more than $50,000, and the deceased held no interest in real property, a small estates application may produce a Certificate in Lieu of Grant.
Exemptions and Deductions: Spouses, Charities, and the Primary Family Homestead
Several reliefs can remove value from the charge altogether. The most significant for families is the spousal exemption: no duty is payable on the affidavit of value for assets passing on death to a surviving spouse.
Bequests to charities are also exempt. The relief covers organisations registered under the Charities Act 2014 and other bodies the Minister of Finance determines to be charitable.
Foreign-currency assets sit outside the charge as well, as does a residential property designated as the deceased's family homestead. Deductions are further allowed for all debts and encumbrances the deceased incurred.
The family homestead concession is narrow but valuable. It exempts one home, and no more, of a person holding Bermudian status; non-Bermudians do not qualify, and the relief sits in section 47A of the Act.
Designation is a formal step. A Bermudian applies to the Tax Commissioner's office with a completed form and evidence of title, and a primary family homestead certificate is issued once the application is processed.
Timing is flexible. The application can be made during the owner's lifetime or, after death, before the affidavit of value is filed with the probate or administration application.
Because the homestead exemption covers a single residence, owners of more than one Bermuda home may find it efficient to deal with the additional property during their lifetime.
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Treatment of Foreign Assets in a Deceased's Estate
Assets outside Bermuda do not enter the estate duty calculation. Duty is computed solely by reference to Bermuda property, so an estate composed entirely of non-Bermuda assets can avoid the charge.
The exclusions are set out in the legislation. Section 4 of the Stamp Duties Act 1976 provides that no duty is chargeable on instruments for the sale, transfer, lease, or disposition of land situated outside Bermuda, or any interest in such land.
The same provision covers securities. Stock or marketable securities issued by corporations incorporated outside the jurisdiction fall outside the charge, except shares held on a Bermuda register.
Foreign-currency holdings follow the same logic. Bank accounts and assets denominated in currencies other than the Bermuda dollar do not meet the definition of Bermuda property and therefore carry no duty.
Lifetime Gifts and the Stamp Duty Charge on Transfers Before Death
Bermuda imposes no gift tax. Lifetime transfers of property are not taxed as such, though stamp duty may apply where a transfer document is executed dealing with Bermuda property.
This distinction creates a genuine planning lever. The duty rates on lifetime conveyances of Bermuda real estate are markedly lower than the rates applied on death.
| Value band | Rate |
|---|---|
| First BM$100,000 | 2% |
| Next BM$400,000 | 3% |
| Next BM$500,000 | 4% |
| BM$1,000,000 – BM$1,500,000 | 6% |
| Over BM$1,500,000 | 7% |
The contrast with death rates is stark: lifetime gifts of Bermuda property top out at 7% above BM$1.5 million, against 20% on death above BM$2 million. Gifts of non-Bermuda property carry a flat ad valorem charge of 1.05% of the value transferred, unless a local trustee is party to the transaction.
There is no spousal exemption for lifetime gifts, unlike the position on death. Even so, the lower band rates mean that transferring assets during life can reduce the eventual estate charge.
Two procedural points apply. Voluntary transfers must be adjudicated as to value by the Tax Commissioner before the deed is treated as properly stamped, and the duty is generally payable within 30 days of delivery of the instrument.
Tax Assurance Certificates: Protection Against Future Estate or Inheritance Tax
Bermuda offers a statutory safeguard against the future introduction of death taxes for qualifying entities. Under the Exempted Undertakings Tax Protection Act 1966, an exempted undertaking may apply to the Minister of Finance for a Tax Assurance Certificate.
The certificate gives a binding undertaking. Should Bermuda enact any tax in the nature of estate duty or inheritance tax, or any tax on income, profits, or capital gains, that tax will not apply to the undertaking or to its shares, debentures, or other obligations.
Current certificates run until 31 March 2035. All exempted entities are eligible to apply, and the assurance extends to estate duty or inheritance tax that might otherwise reach the entity's shares and debentures. You can consult the governing statute through the official legislation database.
Two limits should be understood. The mechanism applies only to exempted undertakings, not to individuals, and it does not override liability under the Corporate Income Tax Act 2023, which applies notwithstanding any such assurance.
Estate Planning Considerations to Reduce or Eliminate the Charge on Death
The central choice for an owner of Bermuda assets is between paying a smaller amount of duty during life and leaving a larger charge to fall on the estate. Several techniques address that question.
- Lifetime gifts. Transferring Bermuda assets to individuals, trusts, or a spouse during life attracts the lower conveyance rates rather than the death-rate schedule.
- Leverage. Securing debt against a Bermuda asset reduces the equity in it, and only equity is assessed for estate duty.
- Multiple homes. Since the homestead exemption shelters only one residence, additional homes can be moved during life to keep them out of the death charge.
- Trust planning. Where non-Bermuda property is added to a trust fund, no duty arises, and exemptions exist for instruments involving a local trustee or an international business.
Homestead designation deserves attention in its own right. A home registered as a primary family homestead, whether before or after the owner's death, transfers to heirs free of death tax.
A cap also limits exposure on trust settlements. Aggregate duty on instruments of settlement and additions in respect of non-Bermuda property is presently capped at $7,500 where the local trustee and international business exemptions do not apply.
Gifts can be structured to suit family circumstances. They may be made to several recipients as tenants-in-common or joint tenants, and may reserve a life interest or a right to occupy.
Outlook: The Future of Death and Inheritance Taxation in Bermuda
The estate stamp duty framework has been substantively stable since its rate schedule took effect on 31 March 1992. That longevity points to firm political consensus around the zero-inheritance-tax position.
No announced or consulted proposal to introduce a standalone inheritance or estate tax has been identified. Tax Assurance Certificates for exempted undertakings run to 31 March 2035, reinforcing the expectation of continuity.
International developments have not changed the personal position. The Corporate Income Tax Act 2023 introduces a 15% charge on Bermuda businesses within multinational groups whose annual revenue reaches EUR 750 million or more, effective for tax years beginning on or after 1 January 2025, but it does not extend to personal estate or inheritance taxation.
One qualification is worth keeping in view. Stamp duty rates on instruments are set by Parliament and adjusted from time to time, so incremental changes to bands or thresholds remain possible without any wholesale reform. The PwC tax summaries track such movements as they occur.
Conclusion
What drives the real planning decision here is not the absence of a headline tax but the precise reach of estate stamp duty over Bermuda-sited property, because a non-resident owner who holds local real estate or registered assets directly may face a charge on death that a cleaner holding structure could have avoided or reduced. The exemptions for spouses and the primary family homestead, combined with the availability of tax assurance certificates, mean the exposure is not fixed and can be addressed before death rather than after.
The one concrete step worth prioritising is a review of how Bermuda property is currently titled and whether a tax assurance certificate has been obtained, since both factors determine the actual duty position rather than the theoretical one.
How Expanship Can Help Your Business in Bermuda
Expanship advises foreign owners on the stamp duty consequences of holding, transferring, and passing on Bermuda assets, including affidavit of value preparation, homestead designation, and the use of exempted structures that fall outside the estate charge. The same team supports the wider needs of a foreign-owned entity on the island, from formation through to continuing compliance.
- Company incorporation and structuring for international owners
- Registered agent and registered office services
- Tax registration and filing support
- Ongoing compliance and corporate secretarial management
- Accounting and bookkeeping
- Introductions to banking partners
To discuss your estate exposure or set up a Bermuda entity, contact Expanship Bermuda.
Frequently Asked Questions
No. Bermuda imposes no inheritance tax, estate tax, or capital transfer tax. The only charge on death is stamp duty, assessed on the affidavit of value supporting an application for probate or letters of administration.
The first BM$100,000 of net estate value is exempt, after which graduated rates apply: 5% to BM$200,000, 10% to BM$1,000,000, 15% to BM$2,000,000, and 20% above that. The rates are ad valorem, applied band by band rather than as a single rate on the whole estate.
It depends on the type of company. Shares in a Bermuda-incorporated exempted company are treated as non-Bermuda property and fall outside the charge, whereas shares in a local Bermuda company are dutiable.
No. Duty is calculated only by reference to Bermuda property, meaning Bermuda-situated assets and Bermuda dollar holdings. Foreign land, securities in non-Bermuda companies, and foreign-currency accounts are excluded under section 4 of the Stamp Duties Act 1976.
Yes, on death. No stamp duty is payable on the affidavit of value for assets passing to a surviving spouse, and bequests to registered charities are likewise exempt. The spousal exemption does not, however, extend to lifetime gifts.
Yes. Lifetime conveyances of Bermuda real estate are taxed at rates rising to 7% over BM$1.5 million, well below the 20% death rate, so transferring assets during life can lower the eventual estate charge. Voluntary transfers must be adjudicated by the Tax Commissioner, and duty is generally due within 30 days of delivery of the instrument.
Legal Disclaimer
The information provided in this article is for general informational purposes only and does not constitute legal, tax, or professional advice. While we strive to ensure the accuracy and timeliness of the content, laws and regulations are subject to change, and the application of laws can vary widely based on specific facts and circumstances.
Readers should not act upon this information without seeking professional counsel tailored to their individual situation. Expanship and its authors disclaim any liability for actions taken or not taken based on the content of this article.
For specific advice regarding your business setup, compliance requirements, or any legal matters, please consult with qualified legal and tax professionals in the relevant jurisdiction.
