What happens if you cannot pay the inheritance tax?
August 7, 2023 | 55,00 EUR | answered by Wilhelm Ackermann
Dear Tax Advisor,
My name is Heike Busse and I have a question regarding inheritance tax. My situation is as follows: My aunt recently passed away and left me a significant inheritance. Unfortunately, I currently do not have enough financial resources to pay the inheritance tax. I am worried about what could happen if I am unable to pay the tax on time.
I have already tried to find different solutions, such as installment payments or taking out a loan. However, this has proven to be more difficult than I thought and I am unsure if these options are the right solution for me. I want to avoid getting into financial difficulties and am therefore seeking professional advice to find the best course of action in this situation.
Could you please explain to me what consequences I could face if I am unable to pay the inheritance tax? Are there any alternative payment options or support measures that I could take advantage of? I would be very grateful for your help and support on this matter.
Sincerely,
Heike Busse
Dear Mrs. Busse,
Thank you for your inquiry regarding inheritance tax. It is understandable that you are concerned if you currently do not have sufficient financial resources to pay the tax. It is important to address this matter in a timely manner to avoid potential consequences.
If you are unable to pay the inheritance tax on time, various consequences may occur. Firstly, late payment interest may accrue, increasing the total amount of the tax debt. Additionally, the tax office may issue reminders and enforcement measures to collect the outstanding tax. In the worst case scenario, forced collection or seizures may occur.
Therefore, it is advisable to contact the tax office early on to find a solution. One option would be to request a deferral or installment payment plan. You can negotiate an individual agreement with the tax office to pay off the tax debt in installments. It is important to disclose your financial situation and demonstrate that you are unable to pay the tax all at once.
Another option would be to take out a loan to pay the inheritance tax. However, you should ensure that the terms of the loan are manageable for you and that you can make the monthly payments in the long term. It may also be helpful to seek advice from a professional financial advisor to find the best financing option for your situation.
There is also the option to seek support, for example by applying for social benefits or seeking tax advice. A tax advisor can assist you with handling the inheritance tax and may identify tax savings or benefits that can help reduce the tax burden.
Overall, it is important to take action early and seek professional advice to find the best solution for your situation. Do not hesitate to contact me or another tax advisor for assistance with managing your tax affairs.
Sincerely,
Wilhelm Ackermann, Tax Advisor
