Tax class in inheritance tax
June 14, 2011 | 20,00 EUR | answered by StB Manuela Ponikwar
Hello,
following question:
Joint will of the biological grandfather and the step-grandmother (step-grandmother is not biological, she is the second wife), grandchildren inherit everything after the death of the last surviving spouse.
The grandfather passed away in 1989, so the step-grandmother was the sole heir. The step-grandmother passed away in December 2009, but due to legal disputes, the details of the inheritance are only now being disclosed.
Which inheritance tax class applies to me as the biological grandchild of the grandfather?
Thank you,
Regards
Dear Seeker,
thank you for your inquiry, which I would like to answer in the context of an initial consultation, taking into account the appropriate fee, as follows.
The grandparents' will is a Berlin will with a unity principle, meaning they appointed each other as sole heirs and determined that after the death of the surviving spouse, the joint estate would pass to the grandchildren as ultimate heirs.
Section 15 (3) of the Inheritance Tax Act provides for a benefit for the ultimate heir. According to this provision, if certain conditions are met, the tax class in relation to the first deceased spouse is applied to the ultimate heir (and not the tax class in relation to the last deceased spouse).
The reason for this rule is the consideration that it is unfair to solely focus on the relationship to the last deceased spouse, to the extent that the assets received by the ultimate heir come from the first deceased spouse and the heir falls into a more favorable tax class due to their relationship to this spouse. Because in the case of a joint will with binding of the last deceased spouse, the ultimate heir inherits following the death of this spouse based on the will of both spouses.
With the Inheritance Tax Reform Act, section 15 (3) of the Inheritance Tax Act has been amended. In the future, the ultimate heir can or must apply for the application of section 15 (3) of the Inheritance Tax Act.
However, section 15 (3) of the Inheritance Tax Act is only applicable to the extent that assets of the first deceased are still present at the time of the surviving spouse's death (or registered life partner).
According to section 15 (1) no. 3 of the Inheritance Tax Act, as a grandchild of your direct grandfather, you are in tax class I with regard to his remaining assets. You therefore have a tax-free allowance of 200 TEUR or 400 TEUR (if your corresponding parent is already deceased).
For your share of inheritance from your step-grandmother (assuming your parent was not legally adopted by the grandmother), you are in tax class III with a tax-free allowance of 20 TEUR.
I hope this information helps.
Best regards,
Manuela Ponikwar
Tax Advisor
www.ponikwar.de
