Are living expenses for the deceased charged as debts against inheritance tax?
January 5, 2022 | 45,00 EUR | answered by Steuerberater Knut Christiansen
Hello,
I have supported my mentally ill brother for years, who lived in the house that we inherited equally from our parents. Among other things, I have largely covered his share of the costs for the house and expenses for daily life (food, hygiene products, clothing).
After his sudden death, his half of the house now passes to me and inheritance tax is due on it.
Can I deduct the expenses, so to speak, as debts/liabilities that I advanced to him, before the inheritance tax is levied on the estate?
If so - do I need to provide concrete evidence for everything?
Or is it enough to provide a sworn statement?
Thank you.
Good morning and thank you for using Ask-an-Expert!
Regarding your question, I would like to provide the following assessment.
The approach of this "advance" as a liability of the estate requires, among other things, that the liabilities of the deceased legally exist and - in general - economically burdened the deceased at the time of death. According to § 10 (3) of the Inheritance Tax Act, estate liabilities do not expire if they correspond to a claim of the heir (confusion).
The tax office will typically only acknowledge the liabilities if you can provide a written agreement between you and your brother stating that it was a type of loan and that he intended to repay these amounts. In any case, a lump sum amount will not be accepted, even if you swear to it. You will need to provide credible evidence for each individual amount.
Therefore, while you can try to claim the amounts as estate liabilities, it is expected that the tax office will have very high requirements regarding proof. From my perspective, it will be difficult to deduct these liabilities.
I hope this answers your question, but feel free to ask follow-up questions at no cost.
Please note that this forum cannot replace a detailed and personalized tax consultation, but is mainly intended to provide an initial tax assessment. Adding or omitting relevant information could lead to a different legal assessment of your issue.
Best regards,
Knut Christiansen
Tax Advisor
