Do I have to pay inheritance tax if I only inherit debts?
December 1, 2022 | 50,00 EUR | answered by Alwin Widmann
Dear tax advisor,
I am Karl Eckstein and I am currently facing a difficult situation regarding a possible inheritance. My grandfather recently passed away and unfortunately only left behind debts. Now I am wondering if I have to pay inheritance tax, even though I have not inherited anything except the debts.
My grandfather had some outstanding loans and obligations that I am now supposed to take over as the heir. I am worried about whether I will have to pay taxes in addition to taking on the debts. Since I do not have a large amount of assets myself, an additional financial burden from inheritance tax would be extremely problematic for me.
Could you please explain to me whether I actually have to pay inheritance tax in this case, even though I am only inheriting debts? Are there ways to avoid or at least minimize this tax burden? I would be very grateful if you could help me in this matter, as I am really unsure about the best course of action in this situation.
Thank you in advance for your assistance.
Sincerely,
Karl Eckstein
Dear Mr. Eckstein,
First and foremost, I would like to offer my sincere condolences on the loss of your grandfather. It is understandable that you are thinking about whether you have to pay inheritance tax in this difficult situation, even though you have only inherited debts.
In your case, it is important to know that inheritance tax in Germany is calculated based on the value of the inherited assets. This means that you only have to pay inheritance tax if you have actually inherited assets that exceed the tax-free allowance. Debts, on the other hand, decrease the value of the inheritance and can therefore reduce or even eliminate the inheritance tax burden.
So, if you have only inherited debts and no assets that exceed the tax-free allowance, you generally do not have to pay inheritance tax. However, it is important that you properly report the inheritance to the tax office and provide all relevant documents to prove that it is indeed purely debts.
If you still have uncertainties or further questions regarding inheritance tax and inheriting debts, I am available to assist you. There are various ways to minimize or avoid the tax burden, such as considering liabilities or tax-free allowances. I am happy to individually assess which options may be applicable in your specific case.
I hope this information has been helpful to you and I am available for any further questions.
Best regards,
Alwin Widmann
