Inheritance and gift tax

Hardly anyone deals with his/her own death willingly. But, someone who makes generous gifts and cleverly designs his/her own will or marriage and inheritance contracts may be able to cut down the inheritance tax payable by his/her heirs so that a large part of the wealth stays within the family. Who will happily make a present to the tax authorities? Besides, with ingenious planning, inheritance disputes can be avoided or reduced after the demise. Where is the benefit of the legal succession, when only one of your children is gifted with an entrepreneurial spirit and can successfully carry on with the business? What is your spouse supposed to do with 50 % of the business at an old age, when he/she lacks the entrepreneurial experience? Our consulting approach primarily aims at implementing your individual wishes on who should get what. To cut down inheritance tax is only secondary. If there is a disagreement between yourself and your children, there are ways and means to reduce their inheritance. If you do not have any heirs, you may want to consider setting up a foundation, or include a foundation or organization you would like to support in your will. Are you the child or the partner of a wealthy old person who wants to avoid paying taxes to the authorities as much as legally possible?
If you know the value of the assets and your proportional right to the inheritance, you can easily determine on basis of the table below whether and how much inheritance tax would be incurred. However, the evaluation for purposes of the inheritance taxation sometimes deviates from the market value. Furthermore, besides any personal tax exempt amounts German inheritance law also has exemptions for certain assets, e.g. for the transfer of company assets

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Inheritance tax rate table, tax exempt amounts

Personal tax exempt amounts:

Tax exempt amount (§ 16 ErbStG)

Tax class (§ 15 ErbStG)

for the spouse and the partner (civil partnerships)

500.000 €

I

for children and grandchildren, whose parents have passed away, as well as for stepchildren and adopted children

400.000 €

I

for grandchildren

200.000 €

I

for parents and grandparents for acquisition by inheritance

100.000 €

I

for parents and grandparents for acquisition by receiving gifts, for siblings, children of the siblings, stepparents, stepchildren, in-laws, divorced spouses and partners of a nullified civil partnership

20.000 €

II

for all the other recipients of a gift or an inheritance

20.000 €

III

Source of the chart: Inheritance tax and gift tax law (ErbStG), § 16 Tax exempt amounts

Inheritance tax rates in Germany (since 2010):

Tax value up to & incl.

Tax class

 12 3
Alle Angaben ohne Gewähr!
75.000 Euro7 %15 %30 %
300.000 Euro11 %20 %30 %
600.000 Euro15 %25 %30 %
6.000.000 Euro19 %30 %30 %
13.000.000 Euro23 %35 %50 %
26.000.000 Euro27 %40 %50 %
über 26.000.000 Euro30 %43 %50 %

Source of the table: Inheritance tax and gift tax law (ErbStG), § 19 Tax rates

Oliver Biernat Steuerberater und Wirtschaftsprüfer

Oliver Biernat is an expert for inheritance and gift tax

Inheritance tax and gift tax

In addition to preparing gift tax and inheritance tax returns, we determine the asset values according to the principles of the inheritance tax. We also provide expert opinions on inheritance tax and on the anticipated inheritance. This includes tax planning for wills/ gifts, tax planning within the family, or the establishment of foundations.

The “normal” consultation process

Step 1: Evaluating the inheritance tax burden on the basis of the status quo

Furnish the particulars of your family relations and your wealth and leave the will or contract of inheritance – if available – to us. We will determine the inheritance tax burden, which would arise post your demise.

Step 2: Evaluating tax-favorable alternatives

We work out various alternatives for you on the basis of your individual wishes, how your “last will” can be implemented and also aim at reducing the actual inheritance tax burden among other things. In our expert opinion, you will be able to find out how much inheritance tax you or your heirs may be able to save and you will also get detailed calculations and detailed opinions on other tax impacts of the respective alternatives.

Step 3: Contractual implementation

You can decide at peace on an alternative and discuss the result with the “family council”, using our help if you wish to do so. The last will optimized in this way will be implemented into a will, inheritance or gift contract in cooperation with a lawyer or notary.

Keeping the money in your family in case of succession, preferably fully.
Call us at: +49 69-25622760
Mail us at: info@benefitax.de