How is the inheritance tax calculated in a will?
September 11, 2022 | 40,00 EUR | answered by Alwin Widmann
Dear Sir or Madam,
my name is Hildegard Ullmann and I am facing the difficult situation of having to deal with inheritance tax. My mother recently passed away and left behind a will in which she appointed me as the sole heir. Now I am wondering how inheritance tax is calculated in this case and what steps I, as the heir, need to take.
I am unsure if the will is valid at all and if I am actually exempt from inheritance tax as the sole heir. Furthermore, I am concerned that I may have to pay high taxes and therefore face financial difficulties. I do not know which documents and records I need to correctly calculate the inheritance tax and which deadlines I need to adhere to.
Could you please explain to me in detail how inheritance tax is calculated in the case of a will and what steps I, as the heir, need to take to pay the taxes correctly? Are there any ways to save on taxes or claim exemptions? I would be very grateful if you could assist me during this difficult time with your expertise and knowledge.
Thank you in advance for your support.
Yours sincerely,
Hildegard Ullmann
Dear Mrs. Ullmann,
I would like to offer my sincere condolences on the loss of your mother and assure you that I am here to support you during this difficult time and assist you with regards to inheritance tax.
In your case, where your mother has named you as the sole heir, inheritance tax will be calculated based on the value of the inheritance. First and foremost, it is important to clarify whether your mother's will is valid. A will is considered valid if it is handwritten and signed by your mother. If there are doubts about its validity, I recommend seeking advice from a lawyer or notary to have it examined.
If the will is valid and you are named as the sole heir, you are generally exempt from inheritance tax, as direct descendants (children, grandchildren) in Germany have a tax-free allowance of 400,000 euros. Additionally, there are further allowances for spouses and registered partners. If the value of the inheritance exceeds the tax-free allowance, inheritance tax will be due. The tax rates vary depending on the relationship and the specific tax-free allowances.
To calculate the inheritance tax correctly, you will need a breakdown of the estate, including the value of all assets (such as properties, accounts, valuable items) and your mother's debts. This breakdown should be prepared by a tax advisor or notary to ensure all relevant aspects are taken into account.
As the heir, you are obligated to independently declare the inheritance tax to the tax office and submit the necessary documents. The deadline for filing is usually three months after becoming aware of the inheritance. If the value of the inheritance exceeds the tax-free allowance and inheritance tax is due, it must be paid within six months of the inheritance.
There are various ways to save on taxes or claim tax-free allowances. One of them is through advance inheritance, where assets are transferred during one's lifetime to maximize tax-free allowances. Additionally, gifts may be tax-favored.
I hope this information is helpful to you and I am available for any further questions you may have. Please do not hesitate to contact me if you need additional assistance.
Kind regards,
Alwin Widmann
