Ask a tax advisor on the topic of Inheritance tax

The heir is a foreigner / the estate is located abroad.

May 22, 2011 | 30,00 EUR | answered by Oliver Burchardt

I am a German citizen. My wife and our two children are French citizens. We live in Germany. We own assets together that would exceed the tax-free allowances in the event of inheritance. This includes a self-occupied property (1 million euros) and rental properties (approx. value 4.5 million euros). However, the rental properties are located in Switzerland, not in Germany. There are no liabilities (mortgages) on the properties. Switzerland does not impose inheritance tax on immediate family members. All assets are held jointly (spouses).

In the event of my death, would my family in Germany have to pay inheritance tax, even though they are foreigners and the estate is located abroad?

In the event of my wife's death, would I have to pay inheritance tax if my wife (a foreigner) leaves me assets located abroad?

Oliver Burchardt

Dear inquirer,

Thank you for your inquiry, which I am happy to answer as part of an initial consultation.

The inheritance tax liability is solely based on where the residence of the heir or the deceased is located, § 2 Abs. 1 Nr. 1 a ErbStG.

Since, according to your description, both you and your family members are resident in Germany (even the residence of one part is sufficient!), the inheritance is taxable in Germany in any scenario. It is irrelevant for this assessment what nationality the heirs have or where the estate is physically located.

I am sorry that I cannot provide you with any other information.

Best regards,

Oliver Burchardt
Tax advisor