In principle, gift and inheritance are subject to inheritance and gift tax under German law. The amount of annual tax revenue in Germany due to inheritances and gifts is relatively low at EUR 6 billion per year (= 0,9 % of total tax revenue); Nevertheless, the inheritance tax can burden individual inheritance cases enormously. We inform you as heirs about your obligation to report an inheritance to the tax office according to § 30 ErbStG. In the case of donations, we also show the reporting obligations for the donor and recipient and explain which deadlines must be observed in each case.
First of all, the tax office must be informed if there is a gift or inheritance. For this, you submit an informal notification to the tax office. The law stipulates that this should take place within a period of three months after the donation has been made or after the event of death has become known. However, there are exceptions to this rule: if it is an inheritance, the notification is not necessary in some cases (for example, in the case of a notarial or court order). However, if real estate, business assets or foreign assets belong to the scope of the transfer, a notification must necessarily be made. In specific cases, this also applies to the transfer of shares to corporations. This affects in particular asset managers and foundations. For them there is a different deadline for notification of one month.
2 Mostly no obligation to report in case of notarization
In the case of a gift, a notification may be waived if it is notarized by a court or notary. An advertisement must be submitted by all parties involved in a donation – each individual is obliged to do so. But it does not apply to the gifted, if the donor fulfills his obligation and discloses the underlying conditions.
The background for the need for a notification is that the tax office is otherwise not aware of this transfer of property. Only by the possibly involved courts and notaries a notification to the tax office is made automatically, because they are legally obliged to do so. Incidentally, this obligation to notify also applies, among other things, to banks, insurance companies, professional provident societies and funeral companies that maintain pension trust accounts.
In the case of an inheritance or gift, there is not a tax liability in all cases. Nevertheless, the tax office must be given the opportunity to check this. The taxpayer is only entitled to refrain from a notification if the tax exemption is obvious (for example, for small amounts or so-called occasional gifts). In case of doubt, you should always seek expert advice from a lawyer or tax consultant, otherwise it can happen that you unintentionally evade a tax. But more on that later.
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This article does not replace tax or legal advice in an individual case. Facts, current law, jurisdiction, documentation and implementation remain decisive.