How can I avoid double taxation on inheritance tax?
April 15, 2022 | 120,00 EUR | answered by Isabel Zimmermann
Dear Mr. Tax Advisor,
My name is Karl Ullmann and I have a question regarding double taxation in inheritance tax. My father recently passed away and left me a large inheritance. Now I am concerned about how to avoid double taxation and what options are available to prevent having to bear double tax burden.
The current situation is as follows: My father has already paid taxes on his wealth, and now as the heir, I am expected to pay taxes on it again. This seems unfair to me and I wonder if there are legal ways to avoid double taxation.
My concern is that I would have to use a large portion of the inherited wealth for tax payments, leaving less for my own needs and future security. I would like to know if there are ways to avoid or at least reduce double taxation, so that I can make the best use of my father's inheritance.
Therefore, my question to you as an expert is: What legal and tax options are available to avoid double taxation in inheritance tax? Are there specific ways of structuring or tax exemptions that can help me reduce the tax burden? I would greatly appreciate your professional advice and support on this matter.
Thank you in advance for your assistance.
Best regards,
Karl Ullmann
Dear Mr. Ullmann,
Thank you for your inquiry regarding double taxation in inheritance tax. It is understandable that you are concerned about how to avoid or at least reduce the double tax burden in order to make the most of the inherited assets.
Double taxation in inheritance tax is a well-known issue that worries many heirs. However, there are various ways to minimize or avoid the tax burden.
One option is to use tax-free allowances. In Germany, there is a tax-free allowance for inheritance tax that varies depending on the relationship between the deceased and the heirs. For example, as a child, you can claim a higher tax-free allowance than a more distant relative. By cleverly structuring the inheritance, you can try to receive as much of the assets tax-free as possible.
Furthermore, there are opportunities to take advantage of tax benefits. These include legal arrangements such as a disability will or an anticipated inheritance. These measures can help reduce the tax burden.
Another option is to transfer assets during your lifetime to minimize inheritance tax. However, it is important to consider the tax implications and possible gift taxes.
For complex cases, I recommend seeking the advice of an experienced tax advisor or lawyer who can assist you in optimizing your tax situation. Through individual consultation, specific solutions for your situation can be found.
I hope this information is helpful to you and I am available to answer any further questions you may have.
Best regards,
Isabel Zimmermann
Tax Advisor
