Are there ways to avoid inheritance tax?
October 14, 2023 | 50,00 EUR | answered by Alwin Widmann
Dear Sir or Madam,
my name is Leonie Otremka and I have a question regarding inheritance tax. My father recently passed away and left me his house. During the inheritance settlement, I found out that I have to pay a high inheritance tax. This tax burden is causing me great concern, as I do not have enough financial means to cover it.
I am wondering if there are possible legal ways to avoid or at least reduce the inheritance tax. I have done some research on the internet, but I am unsure which options could be applicable in my case. Are there any tax planning opportunities or gifting strategies that could help me reduce the tax burden?
I would like to ensure that I exhaust all legal and tax options to minimize the inheritance tax. Therefore, I would be very grateful if you could provide me with specific guidance and tips on how to best proceed in this situation.
Thank you in advance for your support and advice.
Best regards,
Leonie Otremka
Dear Mrs. Otremka,
I would like to offer my sincere condolences on the loss of your father. It is understandable that the question of inheritance tax is causing additional stress during such a difficult time. I will now outline some possible options to reduce or avoid the tax burden.
First and foremost, it is important to know that inheritance tax in Germany is calculated according to a specific tariff, depending on the amount of inherited assets and the degree of relationship to the deceased. However, there are some tax-free allowances that you are entitled to, which can reduce the tax burden. Therefore, it is advisable to first inform yourself about these allowances.
One way to avoid or reduce inheritance tax is through timely planning of gifts during your lifetime. By making a gift, you can transfer assets while still alive and reduce the tax burden for your heirs. However, there are also tax aspects to consider, such as the so-called gift tax. Therefore, it is advisable to seek professional advice in this regard.
Furthermore, there are also tax planning options to minimize inheritance tax. This includes utilizing tax-free allowances, dividing the inheritance among multiple heirs, or setting up tax-optimized estate planning arrangements such as a joint will.
It is important to emphasize that any tax planning related to inheritances should be individually and carefully examined to avoid legal pitfalls. Therefore, I strongly recommend seeking advice from an experienced tax advisor who can provide you with specific guidance and tips on how to best proceed in order to minimize inheritance tax.
I hope this information is helpful to you and I am available to answer your questions and assist you in planning your tax affairs.
Sincerely,
Alwin Widmann
Tax Advisor
