Heirs can claim the estate liabilities, such as funeral costs to reduce inheritance tax. For this purpose, there is a lump sum of EUR 10 300 according to § 10 paragraph 5 no. 3 sentence 2 ErbStG. The Bundesfinanzhof (BFH) now had to decide whether this lump sum should also be granted in the context of a pre-inheritance and post-inheritance. This is explained below.
For example, the costs of the burial of the deceased, the costs of an adequate grave monument, the costs of the usual care of the grave with its capital value for an indefinite period and the costs incurred by the acquirer directly in connection with the settlement, regulation or distribution of the estate or with the acquisition of the acquisition are considered to be estate liabilities.
A lump sum of EUR 10 300 is granted for these costs (§ 10 paragraph 5 no. 3 sentence 2 ErbStG). The amount shall be granted only once for each succession.
Correct succession planning can optimize the tax load. One possibility of succession planning is to regulate testamentary pre- and post-inheritance. Then the pre-inheritance – usually the spouse – inherits the property. But he must receive the property for the successor – often the children. Then they inherit the righteousness.
This succession also has consequences for inheritance tax. Heirs are entitled to the cost of the estate, the lump sum of EUR 10 300. You can claim this tax-reducing from the inheritor. If a spouse inherits, however, the allowance under the inheritance tax of EUR 500 000 is so high that often no inheritance tax is incurred. In this case, the lump sum for the deduction of the estate liabilities does not have any effect, since no tax is incurred anyway. The successor, on the other hand, could only have a smaller allowance, so that for him the application of the lump sum is of considerable importance.
The Bundesfinanzhof recently decided such a case for pre- and post-inheritance. The successor wanted to use the above-mentioned lump sum to deduct the liabilities of the estate. The pre-heir was the husband of the deceased. He had not used the lump sum because the allowance under the inheritance tax was not exceeded and therefore no inheritance tax was incurred anyway.
The niece, on the other hand, only has an allowance of EUR 20 000. This was exceeded by their inheritance. The application of the standard amount of EUR 10 300 was therefore of particular importance to them. However, the tax office rejected the application of the lump sum. In contrast, the niece complained to the Bundesfinanzhof (BFH). Thus, the BFH had to decide whether the inheritance in the context of a pre-inheritance and post-inheritance can also be granted the lump sum of 10 300 euros to deduct the estate liabilities in the inheritance tax, although he is actually also the heir of the first deceased. Then the estate liabilities would actually already be taken into account in the preliminary inheritance.
Therefore, BFH had to deal with whether the inheritance can also deduct the lump sum for the estate liability in the inheritance tax burden.
The BFH argued that despite the testamentary regulation of pre- and post-inheritance there are two succession cases. Although the pre-inheritance and the successor inherit according to §§ 2100, 2139 BGB civil law successively, but both from the original decedent. Inheritance tax on the other hand, § 6 (1) ErbStG applies. Therefore, the pre-inheritance is considered an inheritance. His acquisition is subject to inheritance tax in full and without taking into account the limitation of the succession right.
In accordance with § 6 (2) sentence 1 ErbStG, those to whom the property is transferred have to tax the acquisition as originating from the previous inheritance. The provision is fabricated for inheritance tax purposes that the inheritance becomes heir of the previous inheritance. Both pre-inheritance and post-inheritance therefore constitute the taxation provisions of § 1 (1) no. 1 in conjunction with § 3 (1) no. 1 Alternative 1 EStG.
The lump sum of 10 300 euros is to be granted only once for each succession. It is therefore to be divided into co-heirs. However, the sequence of pre- and post-inheritance cases does not constitute an inheritance case with several heirs under inheritance tax law. Rather, the two processes are to be treated as two separate successions (see above). The flat-rate amount should be set twice for the determination of enrichment. Thus, funeral costs can also be considered twice as a typing, although they do not occur twice. However, the lump sum includes not only funeral costs, but also estate regulation costs. However, discount regulation costs can easily be incurred twice in each case in an unlimited amount. They occur at different heights typically also in a subsequent inheritance. The application of the cost lump sum serves to simplify the tax determination. This also applies in the case of subsequent inheritance, regardless of whether the subsequent inheritance also becomes the heir of the previous inheritance under civil law. For this reason, the lump sum must also be granted to the successor – in this case the niece.
But it may be that the successor has actually not incurred any estate liabilities. The question therefore arises as to whether the inheritance can deduct the lump sum even without actually incurred costs.
The deduction of the lump-sum amount does not require proof that, at least for the reason, costs have actually been incurred which are covered by the lump-sum amount. The law correctly assumes that the inheritance typically incurs corresponding costs. The deduction of the lump sum is expressly possible according to the legal wording without proof. Proof that costs have been incurred by reason would be contrary to the purpose of simplification.
In the context of pre-inheritance and post-inheritance, the post-inheritance is considered the heir of the pre-inheritance. The inheritance, on the other hand, is considered the heir of the first deceased. Therefore, both can claim estate liabilities. They do not even have to prove that they actually incurred advertising costs.
This article does not replace tax or legal advice in an individual case. Facts, current law, jurisdiction, documentation and implementation remain decisive.