A final settlement provision is an arrangement included in your cohabitation agreement. For example, you agree that upon death, you will settle as if you were married in a community of property, splitting your wealth equally. This can be advantageous if one partner has significantly more assets than the other and that partner is the first to pass away.
"}},{"componentType":"sectionTitle","title":"How does it work?"},{"componentType":"paragraph","richBody":{"value":"With a final settlement provision, the surviving partner gains a claim against the estate. This reduces the taxable estate and may lower the inheritance tax due. Important: this only benefits you if the wealthier partner passes away first.
"}},{"componentType":"actionAccordion","actionAccordionList":[{"title":{"value":"An example
"},"icon":{"transformBaseUrl":"https://assets.ing.com/transform/3226510c-7409-47ec-a8dc-0c131b711ae5/Transactions-Plusminus_Outline","type":"image","width":32,"altTextNL":"\"\"","original":"https://assets.ing.com/m/278a3dfbe39fb4e6/original/Transactions-Plusminus_Outline.svg","extension":"svg"},"paragraphs":[{"componentType":"paragraph","richBody":{"value":"Imagine you have lived together for 15 years and have no children. Your will names your partner as sole heir. You have €2.5 million in assets, while your partner has €500,000. Without a final settlement provision, your partner would pay inheritance tax on €2.5 million (ignoring exemptions). With the provision, the taxable amount drops to €1.5 million: a difference of €1 million.
"}}]}]},{"componentType":"sectionTitle","title":"Does this trigger gift tax?"},{"componentType":"paragraph","richBody":{"value":"Historically, this option was limited to married couples and registered partners. For cohabitants, there was long-standing uncertainty about its tax implications, and agreeing to such a clause could trigger gift tax. On 8 July 2025, the Dutch Tax Authority clarified its position: cohabitants can include this provision without gift tax, provided:
[1] See more information about the conditions for being considered a tax partner under the Inheritance Tax Act. You qualify as a tax partner if both of you have been registered at the same address for at least five years. Or if you have had a notarized cohabitation agreement for at least two years that includes a mutual care obligation. According to the Dutch Tax Administration, cohabitants may only include a final settlement clause in their cohabitation agreement once they are tax partners.
"}},{"componentType":"sectionTitle","title":"In summary"},{"componentType":"paragraph","richBody":{"value":"Do you live together and have a significant difference in wealth? Then adding a final settlement provision to your cohabitation agreement could be worth considering. It is a simple step that may save you inheritance tax. However, if the less wealthy partner dies first the arrangement could backfire, potentially increasing the tax burden compared to having no provision at all. This is a matter of bespoke planning. Seek advice from your notary and review your wills at the same time.
Written by Robert Mantel, Tax Expertise Manager.
"}},{"componentType":"accordion","accordionList":[{"title":"Based on the situation as of December 5, 2025","richBody":{"value":"The information provided by ING in this article is not an offer, advice, or financial service and is solely intended to inform you and provide practical tips. We always recommend consulting a specialist or tax advisor regarding your financial and/or wealth planning. This article has been compiled with the utmost care. However, it may contain inaccuracies or omissions. ING is not liable for any damage (of any kind) resulting from the use of the information provided. No rights can be derived from the information. Any rates mentioned are indicative and not binding for ING. All rights and changes reserved. This is a publication of ING Bank NV, registered in Amsterdam.
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