What happens if you can’t pay taxes on a $390,000 inheritance?

The People’s Committee of central Ninh Thuan Province recently proposed removing personal income tax on inherited assets.

In Vietnam, there is a 10% income tax on gifts or inherited assets in the case of securities, stakes in businesses and real estate among others.

Commenting on the news, reader The Reds posed a question:

"Income tax on an inherited property valued at around VND10 billion (US$392,000) would amount to VND1 billion. If the heir does not have the funds to pay this tax, what would happen? Certainly, many complications would arise.

If the heir sells or mortgages the property to pay the tax, they would need to have all the legal documents in order. Things could get very complicated if the deceased passes away before ownership is transferred to the heir.

I have a friend in Europe who struggled for years to settle the inheritance tax on an inherited property."

Reader trantienktqdceo believes taxing inheritance is justified:

"Taxing inheritance is reasonable. First, it would generate additional funds for social welfare services, such as healthcare for the elderly and educational opportunities for the younger generation.

Second, the younger generation should be capable of building their own fortunes. If they wish to benefit from the previous generation’s wealth, they should pay taxes. This would promote a stronger work ethic and discourage reliance on inheritance. It would also help reduce inheritance conflicts and lawsuits among siblings.

Third, it would redistribute wealth within society. Many wealthy individuals with prime real estate have lived off rental income for years without needing to work. Imposing inheritance taxes would encourage the next generations to work harder and help reduce social inequality."

Reader Thanh Y disagreed:

"To accumulate generational wealth, our predecessors had to work hard, either through laboring or venturing into business, and save diligently.

Regardless of where their wealth stems from, they already paid taxes for their income when they earned it. Hence, why should they be taxed a second or third time? It is not fair to collect taxes multiple times on the same asset."

Should there be taxes on inheritance?

*These comments were translated into English with the assistance of AI. Readers’ views are personal and do not necessarily match VnExpress’ viewpoints.