What is the inheritance tax for life partners?
June 1, 2023 | 50,00 EUR | answered by Ella König
Dear tax advisor,
my name is Nina Endres and I am facing a difficult situation regarding inheritance tax. My life partner and I have decided to buy a house together, which should be in both of our names. Unfortunately, my life partner passed away unexpectedly, and now I am wondering how much inheritance tax I, as his life partner, will have to pay.
The current situation is as follows: My life partner and I were not married, but we purchased the house together and both of our names are on the property deed. The house is valued at 400,000 euros, and there are no other heirs or relatives who could make claims. I am now facing the question of how much inheritance tax I, as the life partner, will have to pay and if I can even afford to keep the house.
My concerns are many. On one hand, I am emotionally burdened by the sudden loss of my partner. On the other hand, I am very worried about my financial situation and the future of the house. I do not know if I can handle the inheritance tax and if I can keep the house on my own.
Therefore, my question to you as an expert in inheritance tax: How much is the inheritance tax for life partners in my case? Are there ways to minimize the tax burden or to keep the house without facing financial difficulties? I would be very grateful for your support and advice in this difficult time.
Thank you in advance.
Sincerely,
Nina Endres
Dear Mrs. Endres,
First and foremost, I would like to offer my sincere condolences on the loss of your life partner. I understand that in this difficult time, you may also have concerns about the financial aspects and wish to learn more about inheritance tax. I am happy to assist you as a tax advisor and will try to answer your questions as comprehensively as possible.
In your case, as an unmarried life partner, there are special regulations regarding inheritance tax. If you and your deceased life partner purchased a house together and were both listed in the land register, the house is usually considered as a so-called community of heirs. This means that as a life partner, you will inherit a share of the house corresponding to your share in the land register.
However, there are some particularities to consider regarding inheritance tax for life partners. In Germany, unmarried life partners have a tax-free allowance of 20,000 euros. This means that you will have to pay taxes on the value of the house minus this tax-free allowance. In your case, with a house value of 400,000 euros, this would mean that you have to pay taxes on 380,000 euros.
The inheritance tax for life partners is calculated based on tax classes. As an unmarried life partner falling into tax class III, the tax rate ranges from 30% to 50%. Therefore, you may have to pay up to 190,000 euros in inheritance tax. This is, of course, a significant amount that could heavily impact your financial situation.
There are, however, ways to minimize the tax burden or keep the house without facing financial difficulties. One option would be to apply for a deferral of the inheritance tax to postpone the payment and have more time to raise the necessary funds. Another option would be to request installment payments to spread the tax burden over several years.
It is important that you do not feel left alone in this difficult time and seek professional help. I am here to provide guidance and support you in finding the best possible solution for your situation.
I hope that my explanations have been helpful and I am available to assist you with any further questions.
Best regards,
Ella König
