Rights and obligations in relation to succession in another Member State, including tax rules
Inheritance rights and obligations in another Member State, including taxation rules
According to succession law, the spouse and relatives, i.e. people with the same parents, grandparents or great-grandparents, are the legal heirs (§§ 1924 et seq. of the German Civil Code, BGB). Other heirs can be designated by a will or inheritance agreement. However, the spouse and close relatives are still entitled to a statutory share.
Upon the death of the testator, all assets and debts are transferred to the heirs (§ 1922 BGB). An heir may, in principle, waive the inheritance within six weeks of learning of it (§§ 1942 et seq. BGB).
Whether any inheritance tax is payable, and if so how much, is determined by the value of the acquisition (inheritance, legacy, reserved share etc.) and the relationship of the transferee to the testator.
The enrichment of the transferee is deemed a taxable acquisition. This is the value of the asset acquired, insofar as this is free of tax, minus the liabilities of estate issuing from the testator and minus the tax-exempt amounts.
The valuation of all types of assets is uniformly based on a common value in all cases (market value).
Inheritance tax is calculated based on the value of the taxable acquisition and according to the tax rate by classifying the transferees to tax brackets:
- Tax bracket I: Spouses and civil partners, children (children born in and out of wedlock, adopted children, stepchildren), grandchildren and other descendants as well as for parents and ancestors; tax rate 7% to 30%
- Tax category II: Siblings (including half siblings), children of siblings, step-parents, parents-in-law, children-in-law and divorced spouses; tax rate 15% to 43%
- Tax category III: all remaining transferees; tax rate 30% to 50%
- EUR 500,000 for the spouse,
- EUR 400,000 for a child and a grandchild inheriting in place of a deceased child,
- EUR 200,000 for grandchildren,
- EUR 100,000 for the remaining persons in tax category I,
- EUR 20,000 for persons in tax category II and
- EUR 20,000 for persons in tax category III
Within the EU, the European Inheritance Regulation (ErbVO) applies to deaths after 17 August 2015. Probate cases from before 17 August 2015 are governed by Article 25 of the Introductory Act to the Civil Code (EGBGB), old version.
The ErbVO also regulates the recognition and enforcement of decisions and the acceptance and enforcement of public documents in probate matters, as well as the possibility of applying for a European succession certificate.
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