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 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
3. First degree descendants of siblings
7. Divorced spouse
Tax Bracket III:
All other acquirers.
|Value of taxable acquisition up to and including EUR||As a percentage (%) in tax bracket|
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|