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Inheritance and gift tax

Taxes loom large in any will or contract of inheritance since inheritance or gift tax is charged on every acquisition by inheritance and every gift among the living. The taxes are levied on the value of the estate, which is always the fair market value. Special rules apply to determining the value of land, operating assets and shares in corporations.

The amount of tax depends on the heir’s or donee’s tax bracket, specific tax rate and tax-free allowance. All these factors are ultimately determined by the degree of relatedness. The closer your relations, the lower the tax rates and the higher the tax-free allowance. The most favourable terms are reserved for spouses.

The following tables provide an overview of the tax situation:

Tax brackets

Tax Bracket I:
1. Spouse / registered life partner
2. Children and stepchildren
3. Descendants of the children and stepchildren named in no. 2
4. Blood relatives in the ascending line in case of an acquisition by inheritance

Tax Bracket II:
1. Blood relatives in the ascending line in the case of gifts
2. Siblings
3. First degree descendants of siblings
4. Stepparents
5. Children-in-law
6. Parents-in-law
7. Divorced spouse

Tax Bracket III:
All other acquirers.

Tax rates

Value of taxable acquisition up to and including EUR As a percentage (%) in tax bracket
75.000 7 15 30
300.000 11 20 30
600.000 15 25 30
6.000.000 19 30 30
13.000.000 23 35 50
26.000.000 27 40 50
Over 26.000.000 30 43 50

Personal tax-free allowances

Euro 500.000 for the spouse
Euro 400.000 for children and stepchildren and for children of deceased children and step-children
Euro 200.000 for grandchildren and children of stepchildren
Euro 100.000 for every other person in Tax Bracket I
Euro 20.000 for persons in Tax Bracket II
Euro 500.000 for registered life partners
Euro 20.000 for every other person in Tax Bracket III