Inheritance tax is only paid by families who have relatively little and are ill-advised. This finding, which is widespread among experts, is confirmed by a small special evaluation by the Federal Statistical Office for the F.A.Z. Even if a forced donation to the state may not always be completely avoidable, it can still be extremely pressed. The survey asked about cases that exceeded a volume of 26 million euros in inheritances and gifts. This amount is particularly interesting for two reasons. Firstly, the top tax rate then applies, depending on the proximity to the testator or donor, which is 30, 43 or 50 percent. Secondly, from this value, the exemption rules for business assets are slowly being phased out. According to the latest reform, which was forced by the Federal Constitutional Court, private assets may have to be injected.

Manfred Schäfers

Business correspondent in Berlin.

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What do tax statistics report? In 2021, there were a total of 125 cases where the taxable acquisition was above the €26 million threshold, each from the beneficiaries' point of view. German law does not focus on the estate or a group gift, but on the inflow to the individual recipients. These major acquisitions recently added up to 24.5 billion euros, as the official statisticians report. According to the information, the tax authorities benefited with 2.6 billion euros – roughly one tenth.

The tax rates provided for in the tariff were thus significantly undercut. There is no breakdown into tax classes I, II and III, because tax secrecy would be threatened in so few cases, it was said. The specialist series on inheritance and gift tax shows differentiated information on the number of cases, taxable acquisition and assessed tax only up to 20 million euros, fanned out according to tax classes even only up to 5 million euros.

Low levy rate for gifts

What is noteworthy among the largest transfers of assets in the potential range of top tax rates is the distribution between inheritances and gifts. Of these, 67 cases are attributable to acquisitions on account of death and 58 cases to gifts, each before the tax assessed, and one more or two fewer after assessment.

But that doesn't matter. Something else is significant. The total value of the assets received in the event of death in this group amounted to 7.8 billion euros. Almost 2.2 billion euros in taxes were set on it. Although this is also an effective burden well below the maximum rates, it is still more than a quarter. In the case of donations, this gap is much greater: Acquisitions before deductions totaled 16.7 billion euros – the tax authorities benefited here with just 451 million euros. This corresponds to an effective tax rate of just 2.7 percent.

The explanation is obvious: Death rarely occurs in a planned manner, here, in addition to the hard loss of a loved one, there is then a painful grip of the tax authorities, if appropriate assets are available and there is no provision for the eventuality. Because, of course, inheritances can also be planned. Donations, especially large ones, should always be carefully designed. There's a lot that can be done.