Inheritance and gift tax returns
Who is obliged to submit a gift tax return or inheritance tax return?
Pursuant to Section 30 ErbStG, every acquirer must notify the competent inheritance tax office in writing of any special-purpose benefits (gifts, inheritances) within 3 months of becoming aware of the accrual or occurrence of the obligation. In the case of gifts, this obligation also applies to the donor. Exceptions apply in the following cases:
- one from a German court
- a German notary or
- a German consul
a disposition of property upon death (e.g. will) and if the relationship to the testator is unambiguously evident from this disposition.
This does not apply if the acquisition includes
- Real estate, business assets, shares in corporations that are not subject to the notification obligation pursuant to Section 33 ErbStG or
- Foreign assets.
In this case, a notification to the tax office is still required.
Notification is not required if a gift inter vivos has been recorded by a court or notary. Notaries and courts inform the tax authorities by law.
Inheritance tax rates and allowances
If you know the assets and your inheritance quota, you can easily determine whether and how much inheritance tax would be due based on the inheritance tax rates. However, the valuation for inheritance tax purposes sometimes differs from the market value. In addition to the personal allowances, there are also material allowances and, for example, deductions for the transfer of business assets.
What can happen if I do not submit a gift tax return or inheritance tax return?
Failure to report this may constitute tax evasion if the tax-free amounts are exceeded (because only then is tax due that could be evaded). Tax evasion can also occur if taxes are not assessed on time and if the limit of €25,000 in evaded taxes (§371 AO) is exceeded, you will only be exempt from punishment if you fail to report the tax evasion on time if you pay a surcharge, which is 10-20% depending on the amount of tax evaded. If you are unsure, we recommend that you arrange a consultation with us.
Let us prepare your inheritance and gift tax returns for you!
If you would like us to prepare your gift tax return or the inheritance tax return of another person, we need some information about the testator or donor and the heir or donee. If there is a will, legacy, marriage contract or partnership agreement, please enclose a copy. We will also ask you for details and evidence of the nature and amount of the deceased’s assets on the date of death or of the gift on the date of the gift. This is also the case if these assets have been reduced or increased in the meantime.
You can entrust us not only with the preparation of gift tax returns and inheritance tax returns, but also with the preparation of expert opinions on inheritance tax and anticipated succession. Please do not hesitate to contact us!
