Which taxes are incurred when inheriting?
May 26, 2022 | 50,00 EUR | answered by Felix Richter
Dear team of the online consultation hours,
my name is Anna Mattes and I have a question regarding inheritance tax. Recently, my father passed away and I am now faced with the challenge of accepting his inheritance. I am aware that there may be taxes to pay when inheriting, but I am unsure of the exact taxes that I will have to pay and the amount.
My father left me a house and some money. I am the sole heir and I would like to know how much tax I will have to pay for the house and the money. I am worried that the tax burden could be so high that I may not be able to accept the inheritance in full or may have to incur significant financial losses.
Could you please explain to me what taxes are due when inheriting and how they are calculated? Are there ways to minimize the tax burden or save on taxes? I would greatly appreciate specific information and tips to better assess how the inheritance will impact my financial situation. Thank you in advance for your help.
Sincerely,
Anna Mattes
Dear Anna Mattes,
first of all, I would like to express my sincere condolences for the loss of your father. It is understandable that you would like to take care of the financial aspects of the inheritance during this difficult time. I am happy to explain to you which taxes apply when inheriting and how they are calculated.
Inheritance can generally be subject to two types of taxes: inheritance tax and gift tax. Inheritance tax is levied on the value of the inheritance, while gift tax applies when assets are gifted during one's lifetime. In your case, since you are inheriting your father's estate after his passing, it is inheritance tax that applies.
The amount of inheritance tax depends on the relationship between you and the deceased as well as the value of the inheritance. As a daughter, you are classified in tax class I, which means you have a tax-free allowance of 400,000 euros. Inheritance tax is then charged on any amount exceeding this threshold, with rates varying depending on the size of the inheritance. There are also special rules for real estate that can affect taxation.
There are various ways to minimize the tax burden. One option is anticipatory succession, where the deceased transfers assets during their lifetime. This allows for multiple use of tax-free allowances and can reduce the tax burden. Donations to charitable organizations or transferring assets to tax-friendly countries can also bring tax advantages.
It is advisable to seek advice from a specialized inheritance lawyer early on to understand the tax implications of the inheritance and potentially save on taxes. Together, we can analyze your individual situation and develop the best strategies to minimize the tax burden.
I hope this information is helpful to you and I am available for any further questions you may have. Thank you for reaching out to me.
Best regards,
Felix Richter
