Because income and inheritance tax law have been insufficiently coordinated in Germany, double taxation can occur here in many cases. This is the case, for example, if the inheritance sells shares or real estate acquired free of charge with profit. With § 35b EStG, the law contains an independent reduction provision for corresponding cases, because the standard has the effect of reducing the income tax payable (pro rata).
1st Problem: Double burden with inheritance and income tax
In the case of taxable inheritances, double taxation occurs in certain cases. The reason for this is that the inheritance sometimes realizes a profit through the subsequent fulfillment of an income tax event, which has already been subject to inheritance tax immediately beforehand in the form of hidden reserves. The scope of § 35b EStG is therefore open in the following cases:
This article does not replace tax or legal advice in an individual case. Facts, current law, jurisdiction, documentation and implementation remain decisive.