Inheritance tax: how much tax on inheritance? ⬅️

Inheritance tax: how much tax on inheritance? ⬅️

inheritance Tax

Inheritance tax is paid by anyone who takes up an inheritance. The legacy can be money, a company or real estate. When calculating inheritance tax, the amount of the inheritance and the degree of relationship are important. There is a certain exemption for an inheritance, up to this amount no inheritance tax has to be paid.

The inheritance tax in Germany is regulated together with the gift tax in the ErbStG (inheritance tax law).

If the surviving dependents do not have a will from the deceased, an inheritance certificate can be requested from the competent probate court.

Inheritance tax calculator 2020

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Inheritance tax exemption

The following overview shows all tax-free allowances that apply when taking up an inheritance, as well as the corresponding inheritance tax class according to which the inheritance tax rate is based.

tax bracket relationship Inheritance tax exemption
I Spouse, life partner € 500,000
I Children, grandchildren
(if their parents have died),
Stepchildren, adoptive children
€ 400,000
I grandchildren € 200,000
I Parents and grandparents € 100,000
II Siblings, children of the siblings,
Step-parents, children-in-law, etc.
€ 20,000
III Unrelated heirs € 20,000

An inheritance tax allowance determines the amount above which taxes for an inheritance must be paid. Depending on the relationship with the testator (the person who leaves the inheritance), a different tax exemption applies to inheritance tax. The degree of kinship also determines an inheritance tax class in which one is classified.

  • The inheritance tax class has nothing to do with the tax class in which one is otherwise classified by the tax office. The inheritance tax class as an inheritance arises purely from the relationship to the person who leaves the inheritance (testator).

Inheritance tax amount

The amount of inheritance tax is determined by the inheritance tax rate on estate. Depending on the degree of relationship, the inheritance tax class then applies. If the inheritance exceeds the tax-free allowance, then taxes must be paid for the following values:

Taxable inheritance
(Value > Tax allowance)
Inheritance tax class I Inheritance tax class II Inheritance tax class III
75,000 euros 7% 15% 30%
300,000 euros 11% 20% 30%
600,000 euros 15% 25% 30%
6,000,000 euros 19% 30% 30%
13,000,000 euros 23% 35% 50%
26,000,000 euros 27% 40% 50%
higher than 26 million euros 30% 43% 50%

The inheritance tax rate results from the inheritance tax class and the amount of the inheritance, which is above the corresponding allowance.

With our free inheritance tax calculator, you can quickly and easily calculate how high the tax will be for your taxable inheritance.

The Germans inherit that

  • 47% real estate
  • 43% financial assets
  • 10% real assets
  • The Germans inherit up to 400 billion euros in the year! This is the result of a study that looked at the amount of wealth passed on to heirs.

The study also found that an average of 16 percent of Germans nationwide inherit more than 100,000 euros.

Berlin testament

There is a special form of estate regulation called the Berlin Testament. It is a will of a spouse that guarantees security for both spouses. If one spouse died, the other spouse would inherit his entire estate. If there are no other descendants or surviving dependents, the spouse can freely dispose of the inheritance. If there were still other heirs, they would initially get nothing from a completed Berlin will. The Berlin Testament presupposes that other heirs waive their mandatory share. The children are disinherited at first, but can retain the inheritance if the second spouse also dies.

inheritance tax declaration

The inheritance tax return is required by the responsible district court from any heir who receives part of the inheritance. Before the obligation to submit an inheritance tax return, the tax office will first clarify whether tax liability could arise at all. If you are asked to declare the inheritance, the most important thing is the list of the inheritance that belongs to the inheritance: assets of all kinds, real estate, objects, everything must be listed in the declaration. The inheritance tax return gives the tax office an overview of the different values ​​within an inheritance.
The mantle sheet of the declaration must state what is included in the legacy. The information is mandatory so that the tax office can decide whether inheritance tax is due or not.

Inheritance Tax: Examples and Scenarios

In order to simplify the use of our calculator and the determination of the inheritance tax, various common scenarios are presented, which take up frequently occurring problems and show by calculation examples how these are solved.

Scenario 1: The total inheritance discount is less than € 20,000

This is the simplest case for inheritance tax. Since the total inheritance can never exceed the smallest tax exemption, no tax has to be paid.

Scenario 2: Family father leaves wife and two children in equal parts € 1.5 million

The death of the father or spouse is the most common reason for the inheritance and thus the question of inheritance tax in families.

  • In the present scenario, the wife and the two children would each receive EUR 500,000 (1.5 million through 3).
  • The woman does not have to pay tax because her inheritance corresponds exactly to the tax-free allowance.
  • The two children would have to pay tax of € 100,000 each (€ 500,000 – € 400,000 tax allowance). Inheritance tax is € 11,000 each (11% of 100,000).

The children in the scenario would have to be older than 27 because no allowance has been included. If they are not, the tax-free allowance increases accordingly.

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Christina Cherry
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