What is the compulsory portion and how does it affect inheritance tax?
October 4, 2022 | 50,00 EUR | answered by Otto Dornbusch
Dear tax advisor,
I hope you can help me with my question regarding inheritance tax. My grandmother recently passed away and left behind a substantial inheritance. Since I, as a grandchild, have not been included in the will, I have heard that I still have a claim to what is known as the compulsory portion. However, I am not sure how this compulsory portion affects the inheritance tax.
Currently, I do not have exact information about the size of my grandmother's inheritance and whether there will be any inheritance tax to pay. My concern, however, is that claiming the compulsory portion could increase the tax burden. I want to avoid having to pay more taxes in the end than what is rightfully mine through the compulsory portion.
Could you please explain to me what the compulsory portion is and how it affects inheritance tax? Are there ways to optimize the tax burden and what steps should I take in this situation?
Thank you in advance for your support.
Best regards,
Erik Weiss
Dear Erik Weiss,
Thank you for your question regarding inheritance tax and compulsory portion. It is understandable that you are concerned about how the compulsory portion could affect inheritance tax and how you can possibly optimize the tax burden.
First of all, let me explain what the compulsory portion is. The compulsory portion is a legally defined claim that close relatives such as children and spouses have if they were not included in a will or inheritance contract. In your case as a grandchild, you typically also have a claim to the compulsory portion if you were not mentioned in your grandmother's will.
The compulsory portion corresponds to half of the statutory inheritance share that you would receive if there were no will. It is calculated independently of inheritance tax. This means that you can claim your compulsory portion even if your grandmother had high debts or had already made gifts to other people that reduce the value of the inheritance.
Regarding inheritance tax, it is important to know that the compulsory portion does not directly contribute to the tax burden. Inheritance tax is calculated based on the value of the actual inheritance received, regardless of whether it is the statutory inheritance share, the compulsory portion, or additional assets.
However, in certain cases, the compulsory portion may increase the tax burden if the payment of the compulsory portion divides the inheritance among several people and thus affects different tax brackets. In such cases, it is advisable to seek advice from an experienced tax advisor to optimize the tax burden and take advantage of possible tax benefits.
To minimize the tax burden and assert your claims regarding the compulsory portion, I recommend gathering all relevant documents and scheduling a meeting with a tax advisor. Together, you can analyze your individual situation, examine tax planning options, and ensure that you receive your compulsory portion without paying unnecessarily high taxes.
I hope this information is helpful to you and I am happy to assist with any further questions. Good luck with settling the inheritance and clarifying your claims.
Best regards,
Otto Dornbusch
