Three Children, Three Tax Bills

Leave the same estate to three children living in three different countries and you get three different inheritance tax outcomes on the same money. A child resident in Japan can face inheritance tax up to 55%. A child in Korea faces up to 50%. A child in Germany faces anywhere from 7% to 50%, depending on how closely related they are to you and which allowance band applies. A single will drafted in the parents' home country addresses none of this — it distributes the estate, but it does not touch what each beneficiary's own government does with their share once it arrives.

This is the problem multi-country families actually have, and it is bigger than the structure question everyone asks first.

What Each Beneficiary's Residence Actually Costs

Inheritance and estate tax is levied where the beneficiary lives (or, for some countries, where the deceased lived or was domiciled), not by a single global rule. Here is what the most common beneficiary jurisdictions do:

• United States (non-citizen, non-resident)
  What triggers exposure: Estate tax on US-situs assets only, above a USD 60,000 exemption

• United Kingdom
  What triggers exposure: UK long-term residence test — broadly, UK residence in 10 of the last 20 tax years; a departing long-term resident stays in scope for a 3–10 year "tail" after leaving (shortened to 4 years for those who leave before April 2032)

• Germany
  What triggers exposure: Progressive inheritance/gift tax by relationship class and allowance band (allowances run EUR 20,000–500,000; spouse allowance EUR 256,000)
  Top rate cited here: 7%–50%, not a flat "up to 30%" — 30% falls partway through the Class I (close-family) schedule; unrelated beneficiaries sit in Class III at the top rate

• France
  What triggers exposure: Inheritance tax plus forced heirship rules that override a foreign will for France-situs assets

• Japan
  What triggers exposure: Estate tax on worldwide assets for most residents
  Top rate cited here: Up to 55%

• Korea
  What triggers exposure: Inheritance tax on worldwide assets for most residents
  Top rate cited here: Up to 50%

Two things worth sitting with. First, the UK correction matters beyond trivia: it used to be that a non-domiciled UK-resident could stay outside the worldwide IHT net more or less indefinitely. That is gone. The test is now time-based residence, not domicile, and it follows you out the door for years after you leave. Second, Germany's rates are routinely undersold — advisers quote the 30% band because it is the one most people fall into, then forget to mention what happens to a beneficiary who isn't close family.

Why the Structure Doesn't Solve This Alone

A Panama Foundation, a Cook Islands trust or a private trust company solves control, timing and cross-generational governance. It does not change what Germany, Japan or Korea do to a distribution once it lands with a resident beneficiary there. Three further problems compound it:

Distribution mechanics vary by recipient jurisdiction. A trust distribution can be taxed differently from a foundation distribution, and both can be taxed differently again depending on whether the beneficiary's country treats the structure as transparent or opaque.

Asset location is fixed. Real estate in France cannot be moved to dodge forced heirship. Bank accounts and business interests are tied to where they sit.

Minors and long-horizon control usually rule out immediate distribution, which is exactly what makes a trust, foundation or PTC useful in the first place — the structure earns its keep on governance, not on erasing beneficiary-side tax.

The Structures on the Table

• Foundation (Panama, Liechtenstein)
  What it's good at: Ownerless entity, flexible cross-generational distribution, reasonably CRS-compliant
  Where it's used: LATAM families, increasingly European
  Watch for: Doesn't itself reduce beneficiary-country tax

• International trust (Cook Islands and other common-law jurisdictions)
  What it's good at: Trustee discretion, common-law flexibility
  Where it's used: Anglo family structures
  Watch for: Beneficiary-country trust taxation rules vary widely

• Private trust company (PTC)
  What it's good at: Family control layered over a family trust
  Where it's used: Larger, multi-generation estates
  Watch for: Extra governance cost and complexity

• Coordinated multiple wills
  What it's good at: Simple, jurisdiction-matched
  Where it's used: Any family with assets in several countries
  Watch for: Solves distribution mechanics, not the underlying tax exposure

• Private placement life insurance (PPLI)
  What it's good at: Wraps wealth transfer for substantial estates
  Where it's used: High-net-worth families
  Watch for: Only economic above a meaningful asset threshold

None of these is wrong. The mistake is choosing one and assuming it has done the whole job.

A Worked Case

Take a family with three adult children: one in Frankfurt, one in Tokyo, one in Seoul, and USD 4 million in liquid assets plus a property in France. A Liechtenstein foundation holds the assets and distributes on the parents' deaths. The Tokyo-resident child's share is exposed to Japanese estate tax up to 55% on receipt. The Seoul-resident child faces up to 50%. The Frankfurt-resident child's exposure depends on relationship class and allowance — potentially anywhere in the 7%-50% band, not the 30% a template article might quote. None of that changes because the money sat inside a foundation first; it changes based on planning done in each beneficiary's own jurisdiction — local tax treaties, timing of distributions, and in some cases pre-death gifting that uses up allowances gradually rather than all at once.

The foundation buys governance and control. The country-by-country planning is what actually moves the tax number.

The Practical Mistakes That Recur

• Building a single-jurisdiction estate plan for a family that spans several

• Ignoring beneficiary-country tax on distributions because the structure "already handled it"

• Holding forced-heirship-jurisdiction assets (French, Colombian) in a way that ignores the local override

• Failing to coordinate wills across the countries where assets actually sit

• Leaving life-event changes — a child relocating, a marriage, a new grandchild — unreflected in the plan for years

Where to Start

Book a scoping call and bring one thing: a one-line list of where each of your children currently lives. That alone usually tells us which inheritance tax regimes you're already exposed to, structure or no structure, and shapes everything that follows.

This article describes general planning considerations for internationally dispersed families. It does not constitute legal, tax or estate advice for your specific situation, and inheritance tax rules — particularly the UK's residence test — are subject to further change. Speak to a qualified adviser before acting.