Value of the taxable person

Acquisition (§ 10)

up to and including

... euro | percentage in

Tax Class I | Tax Class II | Tax Class III

75 000 | 7 | 15 | 30

300 000 | 11 | 20 | 30

600 000 | 15 | 25 | 30

6 000 000 | 19 | 30 | 30

13 000 000 | 23 | 35 | 50

26,000,000 | 27 | 40 | 50

over 26,000,000 | 30 | 43 | 50

Family foundations are regularly self-interested, so do not serve charitable or church purposes. This applies every 30 years § 1 (1) no. 4 ErbStG. According to the corresponding regulations, the assets of a foundation are subject to taxation with inheritance and gift tax according to general regulations. This sounds like a considerable disadvantage at first, but it should be noted that you can also avoid the inheritance tax. All that is required is detailed planning in advance!

Avoiding an inheritance tax – why this may be necessary

According to § 1 ErbStG, inheritance and gift tax are generally only subject to transactions in which assets are transferred from one person to another – for example, in the context of gifts or grants. This distinguishes the type of tax from the property tax, under which the Treasury charges an existing property at regular intervals or one-off.

The so-called substitute inheritance tax is an exception here. With it, the ErbStG in § 1 (1) no. 4 ensures that in addition to the income, the property of a family foundation is also subject to taxation at regular intervals. A burden with substitute inheritance tax takes place every 30 years.

The background is that foundations and thus also family foundations have a board of directors, but legally no owners. If a beneficiary, the so-called Destinatär, dies, other people – for example the children – continue to receive benefits from the family foundation. Although certain claims, such as financial support in emergencies, do not transfer the assets of the foundation itself to the legal successors. The missing property also ensures that a family foundation cannot be given away.

In order to avoid this substitute inheritance tax, there are several possibilities. It should be noted in principle that § 1 (1) no. 4 ErbStG applies exclusively to foundations and associations whose purpose is pursued essentially in the interest of a family.

2nd principle of substitute inheritance tax: General rules apply every 30 years

The assets of a family foundation are charged with inheritance tax every 30 years, whereby the 30-year period according to § 1 (1) no. 4 ErbStG already begins with the date of the first transfer of assets to the foundation. How high the injected wealth is, does not matter. As a result, subsequent grants do not postpone the expiry of the 30 years either forward or backwards; the date of taxation is already fixed at the first transfer of assets.

If it comes to taxation, the general provisions of the inheritance and gift tax law apply. The property of the family foundation is in this respect considered an acquisition within the meaning of § 1 ErbStG.

Avoid inheritance tax: What are the possibilities?

Foundation boards, regularly wealthy individuals, have several options to avoid the inheritance tax. They are primarily based on the applicable tax exemptions of §§ 13 to 13d ErbStG, but also on other principles of inheritance and gift tax. As a result, the substitute inheritance tax can be avoided primarily in the following ways: