What happens if you can't pay the inheritance tax?
May 22, 2024 | 50,00 EUR | answered by Ella König
Dear tax consultant,
My name is Hilde Kaiser and I am reaching out to you with an urgent question regarding inheritance tax. My aunt recently passed away and has left me a property and a considerable amount of wealth. I have been informed that I will have to pay a high inheritance tax. Unfortunately, my own financial budget is currently in a difficult situation and I am wondering what will happen if I am unable to pay the inheritance tax.
I am very worried as I do not know what consequences I may face if I cannot settle the tax. Are there options to arrange a deferral or installment payment? Or would it be possible to settle the inheritance tax in the form of goods or services? I am determined to avoid putting my inheritance at risk due to financial difficulties and seek your professional advice.
Thank you in advance for your support.
Sincerely,
Hilde Kaiser
Dear Mrs. Kaiser,
Thank you for your inquiry regarding inheritance tax. I am sorry to hear that you are in a difficult financial situation and are concerned about inheritance tax. I will try to answer you as comprehensively as possible and provide you with some possible solutions.
Firstly, it is important to understand that inheritance tax is a direct tax levied on the acquisition of wealth through inheritance. The amount of tax depends on various factors, such as the value of the inheritance, the relationship to the deceased, and the tax-free allowances available to you as the heir. It is possible that the inheritance tax may be high due to the considerable wealth you have inherited.
If you are unable to pay the inheritance tax immediately, there is usually the option to request a deferral or installment payment. A deferral means that the payment of the tax is postponed for a certain period of time, while an installment payment allows the tax to be paid in monthly installments. It is important that you contact the relevant tax office early on and make the necessary arrangements.
In some cases, it may also be possible to settle the inheritance tax in the form of non-cash assets, such as the transfer of assets. However, such agreements must be coordinated with the tax office and it is important that the non-cash assets adequately cover the value of the tax liability.
It is advisable that you seek advice from a specialized tax advisor in your situation who can help you solve your financial problems. An experienced tax advisor can assist you in applying for a deferral or installment plan and help you pay your inheritance tax in a manageable way.
I hope that my response has provided you with some clarity and I am happy to provide further advice. Please do not hesitate to contact me with any further questions.
Best regards,
Ella König
Tax Advisor
