What tax aspects should I consider when inheriting financial assets?
April 24, 2023 | 40,00 EUR | answered by Christiane Rapp
Dear tax advisor,
My name is Jakob Kohlstein and I am facing the situation of inheriting capital assets through an inheritance. My father recently passed away and left me a significant amount of money as well as securities in his will. Now I am concerned about the tax aspects that may come with this inheritance.
I am unsure if and to what extent I will have to pay taxes on the inherited capital assets. Additionally, I wonder if there are ways to minimize or avoid the tax burden. What are the tax rates for capital gains from inherited wealth and are there any specific considerations I should be aware of?
Furthermore, I am not sure if I need to declare the inherited capital assets in my tax return and what forms are required for that. Are there any special regulations or exemptions that I can take advantage of?
I would greatly appreciate it if you could provide me with comprehensive information on the tax aspects of inheriting capital assets. I am also interested in possible solutions to optimize the tax burden.
Thank you in advance.
Sincerely,
Jakob Kohlstein
Dear Mr. Kohlstein,
First and foremost, my sincere condolences on the loss of your father. I understand that the tax aspects related to inheritance can be burdensome, so I will do my best to provide you with all necessary information.
If you receive capital assets through an inheritance, this is generally subject to inheritance tax. The amount of inheritance tax depends on the relationship between you and the deceased as well as the value of the inherited assets. Children usually have a tax-free allowance of 400,000 euros, so inheritances up to this amount are tax-free. Amounts exceeding this threshold are taxed at a progressive rate, which varies depending on the value of the inherited assets.
In the case of capital gains from inherited assets, these are subject to withholding tax. The current tax rate is 25% plus solidarity surcharge and possibly church tax. It is important to note that capital gains from securities sales are also subject to withholding tax.
It is indeed necessary to declare the inherited capital assets in your tax return. For this, you usually need the form KAP, on which you can declare your capital gains. However, there is also the option to use the attachment KAP in your tax return to provide detailed information on your capital gains.
To optimize your tax burden, you can take advantage of certain tax planning opportunities. These include, for example, using tax exemptions, offsetting advertising costs or special expenses, and tax-optimized management of capital investments.
I strongly recommend consulting a tax advisor to analyze your individual situation precisely and develop tailored tax solutions. I am happy to answer any further questions you may have and wish you success in handling the inheritance.
Best regards,
Christiane Rapp
