Ask a tax advisor on the topic of Inheritance tax

Inheritance division - taxation

July 22, 2015 | 75,00 EUR | answered by StB Steffen Becker

Inheritance settlement: my mother, my 2 sisters, my brother, and I have inherited an apartment from our father (mother 50%, siblings 50%).
Now the 2 sisters are supposed to receive the apartment, with compensation payment to my brother and me, my mother is waiving her share of the apartment.
What taxes are due here? Gift tax? Income tax for the compensation payment? In what amount?
Thank you!

StB Steffen Becker

Dear questioner,

Thank you for your inquiry. I will answer it as part of an initial consultation based on the information provided. Missing or incorrect information may affect the legal outcome.

Inheritance tax:
According to § 16 Abs. 1 Nr. 1 ErbStG, your mother has a tax-free allowance of €500,000, and potentially an additional tax-free allowance of €256,000 according to § 17 Abs. 1 ErbStG.

You and your siblings each have a tax-free allowance of €400,000 according to § 16 Abs. 1 Nr. 2 ErbStG.

Under the given conditions, a tax exemption under § 13 Abs. 1 Nr. 4c.) ErbStG may apply to the apartment if it is a family home.

In the case of your mother "relinquishing" her share of the apartment, this constitutes a gift from your mother to her children. Since this involves multiple acquisitions of the same assets within 10 years, a tax reduction under § 27 ErbStG may apply if inheritance tax is applicable.

Income tax:
The compensatory payments from your sisters to you and your brother are proceeds from the sale of their respective shares in the apartment. If the apartment was owned by your father for more than 10 years, the ownership period of the previous owner (your father) will be attributed to you and your brother, resulting in no taxable private sale transaction (§ 23 EStG).

Therefore, if the above tax-free allowances are not exceeded and the ownership period is met, no taxes will be due.

For a precise assessment and calculation, specific information is needed.

If further consultation is needed on a fee basis, you can contact me at stb-becker@arcor.de.

Kind regards,
Steffen Becker
Tax advisor