Quick Answer: Transferring an Israeli inheritance to a foreign bank account requires four sequential steps: obtaining a succession order (tzav yerusha) from the Family Court (3–5 months), securing tax clearance (nikui mas) from the Israel Tax Authority if real property is involved, collecting and liquidating assets through Israeli banks or a property sale, and executing an international wire transfer subject to anti-money laundering documentation. Israel has no inheritance tax, but capital gains tax applies when inherited property is sold. Most foreign heirs also carry reporting obligations in their home country once the funds arrive.

When a family member dies in Israel and leaves assets to someone living abroad, the inheritance does not move automatically. Under Israel's Inheritance Law 5725-1965, all estate assets pass through a court-supervised process before any funds can cross a border. Most foreign heirs are caught off guard by how long this takes: a simple cash inheritance rarely reaches a home-country bank account in under six months, and an estate containing an apartment typically runs twelve to twenty-four months from start to finish.

This guide covers the complete process in sequence: from the moment probate opens to the moment a wire lands in your account. It also addresses the reporting obligations in your home country that many foreign heirs overlook until a letter from their own tax authority arrives.

1. The Four-Stage Pipeline

The process has four discrete stages that must be completed in order. Attempting to skip or reorder them is the single most common reason estates stall for months longer than necessary.

  • Stage 1 — Probate: Obtain a succession order (tzav yerusha) or will probate order (tzav kiyum tzavaah) from the Family Court. This document legally establishes who the heirs are and in what proportions. No Israeli institution — bank, land registry, or pension fund manager — will deal with heirs until this order is in hand.
  • Stage 2 — Tax clearance: Where real property or business interests form part of the estate, the Israel Tax Authority (ITA — Rashut HaMisim) must assess capital gains tax before the asset can be transferred or sold. This clearance, called nikui mas, is a separate administrative process running alongside or after probate.
  • Stage 3 — Asset collection: Bank accounts are closed, real property is sold, pension balances are claimed, and securities are liquidated or transferred. Each asset class has its own rules and timelines.
  • Stage 4 — International transfer: The net estate proceeds are wired to your foreign account. Israeli banks must comply with anti-money laundering law before executing large international transfers, which requires specific documentation from you as heir.

Treating these stages as a pipeline (rather than separate tasks that can run in parallel) is the clearest way to avoid the most common bottleneck: reaching stage three only to discover that a document only obtainable at stage two was never collected.

2. Obtaining the Succession Order (Tzav Yerusha)

A succession order is the Family Court's confirmation of who inherits, issued under Sections 66–78 of the Inheritance Law 5725-1965. If the deceased left a valid will, you apply for a will probate order (tzav kiyum tzavaah) instead. If they died intestate, you apply for the standard succession order. For practical purposes, both documents accomplish the same thing for heirs downstream: they are what unlocks every subsequent step.

Applications are filed at the Family Court (Beit Mishpat LaMishpacha) of the judicial district where the deceased was last domiciled. Applications must be filed by an Israeli-licensed attorney — non-residents cannot file directly. The application package must include:

  • Death certificate (apostilled if issued outside Israel, with a certified Hebrew translation)
  • Identification documents of all heirs
  • Marriage certificate of the deceased and birth certificates establishing family relationships
  • Declarations by each heir of their interest in the estate
  • A statement on whether a will exists, and the will itself if it does

The court publishes a notice in the official gazette (Reshumot), giving any person with a competing claim 45 days to object. Where no objections arise, uncontested applications are processed in 3 to 5 months. Contested matters — disputes over whether the will is valid, whether a claimant qualifies as an heir, or disagreements between co-heirs — take considerably longer and require separate litigation.

In Practice — Court Fees, Attorney Costs and Document Authentication: Court filing fees for a succession order application are calculated as a percentage of the estimated estate value under the Courts (Fees) Regulations 5767-2007 (as amended). For an estate valued at NIS 500,000, expect a court filing fee of approximately NIS 2,500 to NIS 4,000. Attorney fees for an uncontested application where all heirs are cooperative and documentation is complete typically run NIS 7,000 to NIS 15,000. If any document (birth certificate, marriage certificate, death certificate) was issued outside Israel, it must be apostilled in the country of issue under the 1961 Hague Apostille Convention, then accompanied by a certified Hebrew translation prepared by a sworn translator. If your home country has not acceded to the Apostille Convention, full legalisation through the Israeli consulate is required instead. Build 4 to 8 additional weeks into your timeline for international document processing before the court can even begin its own review.

3. Tax Clearance — The Nikui Mas Requirement

Israel abolished its inheritance and estate tax in 1981. Under Section 97(a) of the Income Tax Ordinance [New Version] 5721-1961, the receipt of an inheritance is explicitly not a taxable event. Receiving bank balances, movable property, or cash from an Israeli estate creates no Israeli tax liability for the heir.

Real property is different. Under Section 5 of the Real Property Tax (Betterment Tax and Acquisition Tax) Law 5723-1963, an heir who later sells inherited real estate is treated as having acquired it at the same price the deceased originally paid — adjusted for inflation using the Consumer Price Index. This "step-in-the-shoes" rule means capital gains tax (mas shevach) is calculated from the original purchase date, not from the date of death. For a property purchased by a parent in the 1980s or 1990s, this can produce a substantial tax liability on a sale today, even on an apartment that has appreciated only modestly in real terms.

Before the Israel Land Authority (Rasha) will register any property transfer — whether directly to heirs or to a buyer — the ITA must confirm that the transaction has been reported and that all tax obligations have been assessed or settled. That confirmation is the nikui mas. Without it, the transfer cannot be registered in the land registry (tabu), and no valid sale can close.

In Practice — How the ITA Processes a Property Sale by a Non-Resident Heir: When a non-resident heir sells inherited Israeli property, the purchasing party's attorney must withhold tax on the sale and pay it to the ITA before disbursing the balance to the seller. The standard withholding rate for non-residents is 25% of the taxable gain. Where the gain cannot be easily calculated at closing, the ITA may instead require a flat 2.5% of the gross sale price as advance withholding under Regulation 2 of the Income Tax Regulations (Withholding from Payments for Services or Assets). The heir then files Form 7002 (Declaration of Sale of a Right in Real Property) with the ITA within 30 days of the date the sale agreement was signed. The ITA issues the nikui mas within 30 to 90 days of receiving the complete declaration package. If the heir overpaid advance withholding, they are entitled to a refund — but recovering it requires a separate request with the ITA and can take a further 3 to 6 months. A licensed Israeli accountant (roh hesbon) who specialises in real property transactions can often negotiate a lower advance withholding rate directly with the ITA where the actual gain is clearly lower than the gross-price-based estimate, saving both time and cash flow.

4. Collecting and Liquidating Israeli Assets

Once the succession order is in hand, the work of converting the estate into transferable cash begins. The process differs by asset type, and each has its own documentation requirements and processing timelines.

Bank accounts: Take certified copies of the succession order, the death certificate, and your own identity documents to the branch where the account is held. The bank's inheritance department will verify the documents, calculate accrued interest, and issue the balance by cheque or wire to the heirs in the proportions stated in the succession order. Allow 2 to 4 weeks for the branch process. Bank Hapoalim and Bank Leumi — which hold the largest share of inherited Israeli accounts — both operate dedicated inheritance service centres that handle out-of-branch requests by mail or secure upload for heirs living abroad, which avoids the need for a personal visit.

Pension and provident funds (keren pensia, kupat gemel): Inherited pension balances operate under the Pension Fund Regulations 5765-2005. The designated beneficiary named on the fund's records takes priority over the succession order; if no beneficiary was designated, the succession order governs. Claims go directly to the pension fund manager, not through the court. The fund manager has 30 days to process a claim once complete documents are submitted. See the full guide on inheriting an Israeli pension fund for the specific forms and tax treatment that apply.

Securities and brokerage accounts: Israeli securities held through a bank's trust department or a broker are transferred to the heirs' own brokerage accounts by presenting the succession order and completing the broker's internal transfer form. Foreign heirs who do not hold an Israeli brokerage account can instruct the broker to liquidate the securities and remit cash. Capital gains on securities sold by a non-resident heir are subject to 25% withholding at source under Section 164 of the Income Tax Ordinance.

Real property: Property must either be transferred into the heirs' names and registered in the land registry, or sold during estate administration with proceeds distributed. A property sale by an estate requires the succession order, the nikui mas, and a licensed Israeli attorney to handle the conveyancing. Real estate agent commissions typically run 2% of the sale price (plus VAT at 18%), though this is negotiable in a buyers' market.

In Practice — Locating Israeli Bank Accounts When the Heir Is Abroad: Foreign heirs often do not know which Israeli banks the deceased used, or whether dormant accounts from decades past exist. The Banking Supervision Department at the Bank of Israel (Pikuah al HaBankim, telephone 02-6552211) operates a central asset registry. An application supported by the succession order and proof of relationship allows heirs to search across all licensed Israeli banks simultaneously at no charge. Additionally, under the Unclaimed Assets Law 5770-2010, funds dormant for more than 7 years are transferred to the Accountant General's Office (Heshav HaMedina) at the Ministry of Finance. These can still be claimed by heirs at any time by presenting the succession order and proof of relationship to the Government Accountant's offices at 1 Kaplan Street, Jerusalem, or through the Ministry of Finance's online claims portal. Running this search before closing the estate administration is good practice — unclaimed balances sometimes run to six figures.

5. The International Wire Transfer

Once estate proceeds have been collected as cash in an Israeli bank account, the final step is moving that money to your home country. Israel imposes no capital controls: funds can be transferred abroad freely without Bank of Israel approval, regardless of the amount. What regulates large transfers is anti-money laundering compliance.

Under the Prohibition on Money Laundering Law 5760-2000, Israeli financial institutions must report all cash transactions exceeding NIS 50,000 to the Financial Intelligence Unit at the Israel Police (Yahal — Yehidat HaModiyin HaPinansi). Wire transfers of equivalent amounts to foreign accounts trigger enhanced due diligence by the bank's compliance department. This is not a barrier; it is a compliance process that clears with proper documentation.

When presenting a large wire transfer instruction as a foreign heir, you will typically need to provide:

  • The original succession order (or a court-certified copy; photocopies are not accepted)
  • Your passport and a secondary identity document
  • The deceased's death certificate
  • A signed declaration of source of funds confirming these are estate proceeds
  • For property sale proceeds: the executed sale agreement and the nikui mas
  • Recipient bank details: full account number, IBAN where applicable, SWIFT/BIC code, and correspondent bank details if required

SWIFT transfers to banks in OECD countries — the United States, the United Kingdom, EU member states, Canada, and Australia — typically clear within 2 to 5 business days. For amounts above USD 100,000 or the NIS equivalent, expect a 24-hour internal compliance hold at the sending bank while documentation is reviewed by the compliance officer. Build this into your timeline.

In Practice — Currency Conversion and Transfer Fees: Israeli banks executing outbound SWIFT transfers convert NIS to the destination currency at the interbank spot rate less a bank spread, typically 0.3% to 0.8%. For transfers above NIS 200,000, it is worth asking the bank's foreign exchange desk to quote a direct rate rather than accepting the default branch rate — Bank Mizrahi-Tefahot, Bank Hapoalim, and Bank Leumi all negotiate on foreign exchange for larger amounts. Wire transfer fees for international SWIFT transactions run NIS 40 to NIS 120 per transfer at Israeli retail banks, plus a correspondent bank lifting fee of approximately USD 15 to USD 25 at the receiving end. If the inheritance is being divided among multiple heirs in different countries, ask your Israeli attorney whether a single transfer to one coordinating heir (who then redistributes domestically) is cheaper than multiple simultaneous SWIFT instructions. The mathematics often favour a single wire, but the tax implications at the receiving end can differ — take advice in each heir's home country before choosing the structure.
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6. Reporting Your Israeli Inheritance in Your Home Country

The moment a wire lands in your home-country bank account, the Israeli part of the process is complete. What begins immediately is your obligation to your own country's tax and reporting rules. This is the stage foreign heirs most consistently miss, not from bad intent but because the Israeli attorney who managed the estate process has no visibility into what happens on the other side of the wire.

United States: American citizens and green card holders who receive more than USD 100,000 in total from a foreign estate must file IRS Form 3520 (Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts). This is a reporting obligation, not a tax: the inheritance itself is not subject to US income tax. The form is due by April 15 for the year the funds are received (October 15 with an extension). Penalties for failure to file are the greater of USD 10,000 or 35% of the gross reportable amount. Inherited Israeli bank accounts must also be considered for FBAR filing on FinCEN Form 114 if their aggregate value exceeded USD 10,000 at any point during the calendar year — this applies even if the accounts were in the deceased's name while you held the succession order but had not yet received the funds.

United Kingdom: UK beneficiaries receiving assets from a foreign estate do not pay UK inheritance tax on the receipt itself, since Israel charges none. However, once the Israeli assets are in a UK beneficiary's estate, they may be subject to UK IHT on the beneficiary's own death. Any income generated by Israeli assets held during the administration period — rental income from inherited Israeli property, for instance — is subject to UK income tax in the year it arises and must be reported on Self Assessment under HMRC's foreign income rules. Israeli capital gains on an inherited property sold during the administration are generally outside the UK CGT charge for non-UK-domiciled beneficiaries claiming the remittance basis, but this is a genuinely complex area that requires specific UK tax advice.

Canada: Canadian residents must report the receipt of foreign inheritances on Form T1135 (Foreign Income Verification Statement) if total foreign property held at any point in the year exceeds CAD 100,000. The receipt of the inheritance itself is not taxable, but future income from retained Israeli assets — interest, dividends, rental income — must be included in the Canadian income tax return in the year earned.

France: French heirs face a more demanding regime. French law imposes French inheritance tax (droits de succession) on worldwide assets received by French residents, regardless of where the deceased lived. Rates between non-immediate-family members can reach 60%. Because Israel charges no inheritance tax, there is no foreign tax credit to offset against the French charge. French heirs inheriting substantial Israeli assets should take French notarial advice before the Israeli estate is finalised, since the French declaration deadline runs from 6 to 12 months from the date of death depending on where the deceased was domiciled.

7. Common Mistakes Foreign Heirs Make

The following errors appear consistently in cases where estates take years rather than months, or where heirs receive substantially less than they expected:

  • Starting without an Israeli attorney. Non-residents cannot file succession order applications themselves. Attempting to navigate the Family Court without local representation typically results in rejected filings, missed notices, and months of delay. Engaging an Israeli probate attorney is the first step, not a last resort.
  • Assuming that no inheritance tax means no tax involvement at all. Heirs who know Israel has no inheritance tax sometimes assume no interaction with the ITA is necessary. If the estate includes any real property, this is incorrect. The nikui mas requirement applies regardless of how small the apparent capital gain may be, and the ITA will not issue the clearance without a properly filed declaration.
  • Presenting photocopies when originals are required. Israeli banks and the land registry require original succession orders or court-certified copies — not photocopies, even notarised ones. If you are abroad, arrange for the original to be sent by registered post or for the court registry to produce a certified copy before the documents leave Israel.
  • Missing home-country reporting deadlines. Form 3520 for US heirs and equivalent filings in other countries have fixed deadlines tied to the tax year in which the inheritance is received, not the date of death. Heirs who receive funds in late December and then forget to file by the following April 15 are among the most common penalty cases in the cross-border estate context.
  • Distributing estate funds informally before all heirs agree. Where multiple heirs exist and one acts as the informal estate coordinator, distributing funds before all heirs have signed an inheritance agreement (heskem yerushanim) creates legal liability. An heir who paid out money to other heirs without a signed agreement can be held personally responsible if the amounts are later disputed. See the guide on inheritance agreements between heirs in Israel for the required structure and what it must cover.
  • Overlooking dormant accounts at secondary banks. Israeli banks are not required to proactively notify foreign heirs of existing balances. An heir who searches only the banks they know about may miss significant accounts. The Bank of Israel central registry search described above should be completed before the estate is closed.
In Practice — Working with an Israeli Accountant Alongside Your Attorney: For estates containing real property, a licensed Israeli accountant (roh hesbon) with real property specialisation is as important as the probate attorney. The accountant negotiates the advance withholding rate with the ITA, prepares Form 7002, manages the nikui mas application, and files for refunds of overpaid withholding tax. Professional fees for attorney and accountant combined typically run 1.5% to 3% of the estate's total value on a property sale. Coordinated advice at this stage consistently recovers more than it costs, both in direct tax savings and in time. The Israeli Institute of CPAs (Lishkat Roh HaHesbon) maintains a member directory at icpas.org.il where you can search for accountants with estate and real property specialisation by region.