When does inheritance tax need to be paid?
February 27, 2023 | 50,00 EUR | answered by Wilhelm Ackermann
Dear tax advisor,
I am currently facing the situation that I will inherit an estate and I am wondering when exactly the inheritance tax will be due. My father recently passed away and left me his house, which is valued at about 500,000 euros. I have already spoken to the probate court and accepted the inheritance, now I am wondering when and to what extent the inheritance tax will be due.
I am not sure if I have to pay the inheritance tax directly after accepting the inheritance or if there is a specific deadline for this. I am also worried about how high the tax burden will ultimately be and if I can afford it. Are there ways to avoid or at least minimize the inheritance tax?
I would be very grateful if you could provide me with more detailed information on this matter so that I can prepare accordingly. I certainly do not want to encounter any legal problems or unexpected costs.
Thank you in advance for your help.
Kind regards,
Günther Pilz
Dear Mr. Pilz,
Thank you for your inquiry regarding inheritance tax in relation to the house you inherited from your deceased father. I understand that you are concerned about the timing and amount of the tax, and I would like to provide you with all the information you need.
Inheritance tax is generally due as soon as the inheritance occurs and you have accepted it. In your case, since you have already spoken to the probate court and accepted the inheritance, the inheritance tax will already be due. You must independently declare the tax to the relevant tax office and pay the due amounts accordingly.
The amount of inheritance tax depends on the value of the inherited assets, in your case, the value of the house. A tax-free allowance is taken into account for the calculation of the tax, which varies depending on the relationship to the deceased. In your case as a son, the tax-free allowance is 400,000 euros, so only the amount above this allowance needs to be taxed. For a house value of 500,000 euros, you would therefore have to pay 25,000 euros in inheritance tax.
There are various ways to minimize or avoid inheritance tax. One option is to use tax-free allowances for specific assets, such as the family home. Under certain conditions, an increased tax-free allowance of up to 500,000 euros can apply. Lifetime gifts can also help reduce the tax burden.
It is advisable to consult with a tax advisor early on to assess the tax implications of an inheritance and take measures for tax optimization if necessary. This way, you can ensure that you do not incur unexpected costs and avoid legal issues.
I hope this information has been helpful, and I am available for any further questions.
Sincerely,
Wilhelm Ackermann
