How is inheritance tax calculated on assets held abroad?
July 29, 2022 | 40,00 EUR | answered by Ella König
Dear tax advisor,
my name is Edith Götzinger and I am facing a complex situation regarding inheritance tax. My father recently passed away and has left me a considerable amount of wealth, some of which is also located abroad. I have heard that inheritance tax is calculated differently for foreign assets compared to domestic assets and I am therefore concerned about the financial implications.
My father had properties and bank accounts both in Germany and in other countries. I am unsure how the different assets will be taken into account in the calculation of inheritance tax and am afraid that I may have to pay more taxes than I expected. I would like to understand the regulations and provisions regarding foreign assets and if there are ways to minimize the tax burden.
Could you please explain to me how inheritance tax is calculated for foreign assets and what specific regulations need to be considered? Are there any specific documents or information that I need to provide in order to calculate the tax correctly? And are there any strategies or measures that I can take to reduce the tax burden?
I would greatly appreciate your support and advice on this matter. Thank you in advance!
Best regards,
Edith Götzinger
Dear Mrs. Götzinger,
first and foremost, I would like to offer my sincere condolences on the loss of your father. It is understandable that you are also concerned about the financial implications of the inheritance during this difficult time. Therefore, I would like to explain to you how inheritance tax is calculated for foreign assets and what special regulations need to be considered.
When calculating inheritance tax for foreign assets, the same regulations generally apply as for domestic assets. This means that the entire inheritance, including assets in Germany and abroad, is taken into account when calculating the tax. Foreign assets are usually converted into euros to make them comparable to domestic assets.
It is important to note that Germany has agreements with some countries to avoid double taxation. This means that in such cases, inheritance tax only needs to be paid in one of the two countries. Therefore, you should check whether such an agreement exists with the country where your father's foreign assets are located.
In order to accurately calculate inheritance tax, you must provide the tax office with all relevant information and documents. This includes evidence of foreign assets, such as land register extracts for real estate or bank statements for bank accounts. It is important that you list all assets accurately and can prove their value at the time of inheritance.
There are various strategies and measures you can take to reduce the tax burden. This includes timely planning and structuring of the inheritance to optimize tax exemptions. Lifetime gifts can also help reduce the tax burden. It is advisable to seek advice from an experienced tax advisor to find the best possible solution for your individual situation.
I hope this information is helpful to you and I am available for any further questions. Please do not hesitate to contact me if you need further assistance.
Sincerely,
Ella König
