Are there any tax differences in inheritance tax between married couples and registered domestic partners?
June 27, 2023 | 50,00 EUR | answered by Alwin Widmann
Dear tax advisor,
My name is Robert Klinger and I have a question regarding inheritance tax. My life partner and I have been in a registered civil partnership for many years and we recently started thinking about the tax aspects in case of inheritance.
I was not aware that there might be tax differences between married couples and registered civil partners. Therefore, I would like to know if there are indeed differences in inheritance tax and if so, how these could affect us as registered civil partners.
I am concerned that we may be at a disadvantage when it comes to inheritance tax. Since we have no biological relatives and our legal heirs solely include our life partner, it is even more important for us to be informed about possible tax advantages or disadvantages.
Could you please explain to me if and what tax differences exist between married couples and registered civil partners in the context of inheritance tax? Are there any specific strategies to avoid or minimize tax disadvantages?
I thank you in advance for your support and look forward to your expert advice.
Sincerely,
Robert Klinger
Dear Mr. Klinger,
Thank you for your inquiry regarding inheritance tax in relation to your registered civil partnership. It is understandable that you are concerned about the tax aspects in case of inheritance, especially when it comes to potential differences between married couples and registered civil partners.
In fact, there are tax differences between married couples and registered civil partners in the context of inheritance tax. In Germany, married couples benefit from a very high tax exemption threshold for inheritance tax, which is set at 500,000 euros. This means that married couples can inherit tax-free up to this amount. For registered civil partners, however, the tax exemption threshold is only 20,000 euros. In addition, registered civil partners are subject to higher tax rates compared to married couples.
These differences can result in registered civil partners actually being tax disadvantaged compared to married couples when it comes to inheritance tax. In your case, where you and your partner have no biological relatives and have named each other as sole legal heirs, it is all the more important to be aware of possible tax implications.
To minimize potential tax disadvantages, there are certain planning options that you can consider. One option, for example, could be the timely creation of a will or inheritance contract to reduce the tax burden on your partner. Lifetime gifts may also play a role in maximizing the tax exemption threshold.
It is advisable to seek advice from an experienced tax advisor to discuss your individual situation and the best planning options for you and your partner. A tax advisor can help you make tax optimizations and ensure that your estate succession is tax-optimized in the event of inheritance.
I hope that this information is helpful to you and I am available to answer any further questions you may have.
Best regards,
Alwin Widmann
Tax Advisor
