Inheritance & succession advice
Transferring wealth requires sensitivity and foresight. Not thinking about the tax impact in advance can result in substantial tax payments for the recipients, in some cases even without inheriting any cash.
Tax should not be the driving force, but a piece of the puzzle in your inheritance and succession planning. We provide comprehensive guidance on the tax implications while making your goals and personal situation the priority. This includes not only the filing of the required tax forms but also estate planning from a tax perspective and the evaluation of assets and businesses.
Does it make sense to already gift some of my assets to my dependents instead of inheriting them later?
Already gifting assets during one’s lifetime to dependents can save substantial amounts of taxes. Germany has material exemptions for gifts and inheritances to dependents and spouses (and reduced exemptions to other relatives), which can be used every 10 years.
Careful planning during one’s lifetime can make it possible to utilize the exemption not only during the inheritance, but also in advance. This is especially important when real estate is inherited, which most of the time would exceed the exemption, if only utilized during the inheritance.
I’m inheriting or being gifted foreign assets. Are those subject to tax in Germany?
If you are considered as a German tax resident, there is an obligation to disclose any gifts or inheritances received within three months of receipt to the German tax authorities.
Whether German tax is imposed depends on the amount, the taxation right of the foreign jurisdiction under double tax treaties and several tax exemptions for certain assets.
Failure to report the gift/inheritance can lead to substantial penalties in the future and jeopardize future estate planning.