Question 1

How high is the inheritance tax allowance?

Accepted Answer

The allowance depends on the relationship: Spouses receive €500,000, children €400,000, grandchildren €200,000, parents (inheritance) €100,000. Siblings, nephews/nieces, and unrelated persons receive only €20,000.

Question 2

Which tax class applies to my inheritance?

Accepted Answer

There are three tax classes: Class I for spouses, children, grandchildren, and parents (in inheritance). Class II for siblings, nephews/nieces, and parents (for gifts). Class III for everyone else. The higher the tax class, the higher the tax rate.

Question 3

Do I have to pay inheritance tax on an inherited house?

Accepted Answer

For Tax Class I, you receive a 10% valuation discount on owner-occupied residential property. Spouses and children can even inherit the family home completely tax-free under certain conditions if they live in it for at least 10 years.

Question 4

What is the difference between inheritance tax and gift tax?

Accepted Answer

Both tax types are based on the same law (ErbStG) and use the same allowances and tax rates. The key difference: For gifts, the allowances can be used again every 10 years. Also, for parents, Tax Class II applies for gifts instead of Class I.

Question 5

How does the 10-year rule for gifts work?

Accepted Answer

The gift tax allowances renew every 10 years. This means: If you gift your child €400,000 every 10 years, no gift tax applies. All gifts within a 10-year period are added together.

Question 6

Can siblings inherit tax-free?

Accepted Answer

Siblings only receive an allowance of €20,000 and fall into Tax Class II with tax rates of 15-43%. Larger inheritances to siblings are therefore heavily taxed. Forward-looking estate planning can help reduce the tax burden.

Question 7

What is a maintenance allowance (Versorgungsfreibetrag)?

Accepted Answer

In addition to the personal allowance, spouses receive a maintenance allowance of €256,000 and children (depending on age) up to €52,000. This is reduced by the capital value of maintenance benefits (e.g., widow's pension).

Question 8

How is business property treated for inheritance tax?

Accepted Answer

Business property can be exempted from inheritance tax by 85% (standard exemption) or even 100% (optional exemption) if certain conditions are met: The payroll sum must be maintained over 5 years and administrative assets must not exceed certain limits.

Question 9

Do I have to pay inheritance tax immediately?

Accepted Answer

The tax office issues a tax assessment notice. You typically have four weeks after receiving the notice to pay. For real estate inheritances, a deferral of up to 10 years can be granted upon request if immediate payment would constitute significant hardship.

Question 10

Can I avoid inheritance tax with a Berlin Will?

Accepted Answer

No, on the contrary: The Berlin Will can actually increase the overall tax burden because the children's allowances remain unused at the first death. Instead, a combination of legacy solutions and lifetime gifts is recommended.

Guide: Inheritance Tax Calculator

German Inheritance Tax 2026: Allowances, Tax Classes & Money-Saving Tips

Inheritance Tax Allowances 2026: How Much Is Tax-Free?

Inheriting Real Estate: Valuation, Taxes & the Family Home

Gifting Instead of Inheriting: Save Taxes with the 10-Year Rule

Inheritance Tax on Business Assets: Exemption Rules Explained

Writing a Will: Tax-Optimized Inheritance Planning

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