Can grandchildren also be subject to inheritance tax?
January 31, 2023 | 50,00 EUR | answered by Alwin Widmann
Dear tax advisor,
my name is Heike Endres and I am facing a complex situation regarding inheritance tax. My grandmother recently passed away and left me and my siblings a considerable sum of money. Now I am wondering if my children, the grandchildren of my grandmother, are also subject to inheritance tax.
My grandmother has written a will in which she clearly stated how her assets should be distributed. She explicitly mentioned that her grandchildren should also be included. However, I am unsure if this has implications on inheritance tax and if my children will indeed have to pay taxes.
I am concerned that the inheritance tax burden for my family could unexpectedly be high and therefore want to explore all possible scenarios and solutions in advance. Are there any ways to minimize or completely avoid the tax burden for my children? How does inheritance tax affect grandchildren, especially if they are still minors?
I would greatly appreciate it if you could assist me with this complex matter and provide me with all relevant information regarding inheritance tax for grandchildren. Thank you in advance for your support.
Sincerely,
Heike Endres
Dear Mrs. Endres,
Thank you for your inquiry regarding inheritance tax for grandchildren. It is understandable that you are in a complex situation and would like to clarify all possible implications and solutions in advance.
In principle, grandchildren are also subject to inheritance tax when they inherit assets from their grandparents. The amount of tax depends on the degree of relationship and the value of the inherited assets. In your case, where your grandmother explicitly mentioned in her will that grandchildren should also be considered, the assets will be divided accordingly and your children would be subject to inheritance tax.
To minimize or even avoid the tax burden for your children, there are various options. One of them would be that you have made gifts to your children during your grandmother's lifetime. Gifts made within 10 years before the donor's death are credited towards the inheritance and can thus reduce the tax burden.
Another aspect to consider is the assets of your children. If your children are still minors, they can also inherit. In this case, the parents as legal representatives would have to pay the inheritance tax for the minor children. It is important to consider all legal aspects and, if necessary, appoint a guardian to manage the affairs of the minor children.
It is recommended to consult a tax advisor or lawyer in any case to discuss your individual situation and find the best possible solution. I am also available in my online office hours to answer further questions and assist you in handling the inheritance tax for grandchildren.
I hope I could help you with this information. Please do not hesitate to contact me if you have any further questions.
Best regards,
Alwin Widmann
