Which tax class applies to an inheritance?
August 21, 2022 | 50,00 EUR | answered by Ella König
Dear tax advisor,
my name is Otto Werner and I am facing an important decision regarding an inheritance, where I am not sure which tax class I will be assigned to. My father recently passed away and left me a substantial inheritance. I have heard that the amount of inheritance tax depends on the tax class one is classified into.
I am married and have two children. My spouse is currently on parental leave and we are unsure how this could affect the tax class. I have also heard that there are different tax-free allowances depending on the tax class one falls into. My concern is that I may be classified into a higher tax class and therefore have to give a large part of the inheritance to the state.
I would like to know which tax class applies to me for the inheritance from my father and if there are ways to minimize the tax burden. Are there specific steps I can take to fall into a more favorable tax class? What tax-free allowances am I entitled to and how can I ensure that I make the best use of them?
Thank you in advance for your help and advice.
Best regards,
Otto Werner
Dear Mr. Werner,
Thank you for your inquiry regarding inheritance tax and your current situation following the death of your father. It is understandable that you are concerned about the tax class and the possible impact on the amount of inheritance tax. I would like to provide you with some information that may help you in your decision.
First of all, it is important to know that the amount of inheritance tax depends on the size of the inheritance as well as your personal situation, including your family circumstances and any exemptions. In Germany, there are three different tax classes, which are based on the relationship between the deceased and the heir.
As a direct descendant of your father, you fall into tax class I as his child. In this tax class, the highest exemptions apply, meaning that you can receive a larger portion of the inheritance tax-free. The exemption for children is currently 400,000 euros. In addition, there is an exemption for the spouse of 500,000 euros. If you are jointly assessed with your spouse, you can even claim a total exemption of 500,000 euros for your spouse and 400,000 euros for yourself.
Regarding your spouse's parental leave, this could indeed have an impact on the tax class, especially if your spouse has no income of their own. In this case, you may potentially benefit from tax class III, which is normally for widows or single parents. This could mean that you have to pay a lower tax rate.
To minimize your tax burden and make the most of the exemptions, I recommend that you consult a tax advisor early on. An experienced tax advisor can help you utilize the best possible tax planning options and avoid potential tax pitfalls. Additionally, they can inform you about steps you can take to optimize your tax burden and possibly fall into a more favorable tax class.
I hope this information is helpful to you and I am available for further questions. Thank you for your trust and I wish you all the best in your decision regarding inheritance tax.
Sincerely,
Ella König
