The transfer of assets by a deceased person is generally subject to inheritance tax in Germany. This applies both to inheritances and to legacies.
In the case of inheritance, it is possible to modify the legal succession before the death by means of a will. This allows the testator to arrange the distribution of their assets before their death. When creating a will, personal tax brackets and tax exemptions, such as for the self-owned family home, should be taken into account. We advise our clients on the tax-relevant aspects of creating a will or inheritance contracts to ensure the most tax-optimally possible transfer of assets in the event of death. In this process, we work closely with lawyers and notaries.
In the event of an inheritance, we prepare the inheritance tax returns for our clients. In doing so, we ensure that any possible tax exemptions are properly taken into account. By identifying potential gains for surviving spouses, the inheritance tax for the surviving client is not unnecessarily set too high. Where real estate is also transferred in the event of death, we help determine the tax value of the real estate and examine whether the real estate is entirely or partially exempt from tax.
Even after the deceased has passed away, the heirs may still be required to fulfill tax obligations for them. This includes, for example, filing a tax return for the year of death. We help our clients prepare these tax returns.
Sometimes heirs discover after the death that the deceased did not complete their tax returns in the past and, for example, not all income was included in these returns. The tax authorities may even consider this as tax evasion. For the heirs, this may mean that they have to correct the deceased’s returns for the past and pay the resulting taxes. If the heirs fail to correct the erroneous returns, they may themselves become criminally liable. We provide extensive advice to the heirs in such situations, highlighting possible risks that may arise and showing possible solutions.
As tax advisors, we advise our clients on all tax-related matters, identify existing tax risks, and suggest solutions to avoid tax risks.
