For so-called large acquisitions (acquisition over EUR 26,000,000), you can make use of the protection requirements test (§ 28a ErbStG) under certain conditions. For this purpose, one determines the amount of the pro rata disposable property the inheritance or gift tax could be paid. If then the inheritance or gift tax is higher than the available assets, the excess amount would be forgiven. However, the waiver of the tax by the relief needs test for large acquisitions is subject to additional provisions here.
In the case of inheritance and gift tax, operating assets and shares in corporations (over 25 %) are tax-advantaged by §§ 13a, 13b ErbStG. The control protection for this is 85 %; on request, the option waiver of 100 % may be used. Both the rule protection and the option protection are only possible if the beneficiary property does not exceed the limit of EUR 26,000,000. On the other hand, one speaks of an acquisition of EUR 26,000,000 in the inheritance and gift tax law of so-called large acquisitions.
In this regard, it should be noted that inheritances and gifts are treated equally here and there are no differences in tax terms.
1.1. The meltdown regulation according to § 13c ErbStG
In the case of large acquisitions, the exemptions under §§13a, 13b ErbStG would in principle be completely waived. However, this results in an unreasonable hardness for the gifted person, since relief, even if it is only slightly exceeded, is completely eliminated. In order to counteract this “hardness”, the legislature introduced the smelting regulation in § 13c ErbStG. So instead of 100 to 0, the sparing is gradually reduced here on request – which is to the advantage of the taxpayer. The melting rate is 1% per full EUR 750,000, which exceeds the limit of EUR 26,000,000. A full melting is achieved at about EUR 90,000,000.
1.2. Environmental requirements test for large acquisitions according to § 28a ErbStG
Alternatively, the taxpayer can apply for a so-called spare needs test according to § 28a ErbStG – the application is revocable. If it is impossible for the taxpayer to pay the tax arising from the inheritance or gift, a (partial) remission may be considered. In such cases, it is important how high the assets available to the taxpayer are. The calculation and the procedure for the available assets result from law and directive.
As already mentioned, the grace requirements test only applies if the beneficiary assets within the meaning of §§ 13a, 13b ErbStG exceed the amount of EUR 26,000,000. In order to be able to (partially) waive the tax due on the beneficiary property, the acquirer (as a taxpayer) must prove that it is impossible for him to pay the tax. For this reason, the question rightly arises as to how the proof is made and which assets are available to the acquirer for tax payment. § 28a paragraph 2 ErbStG regulates this case.
2.2. The available assets of the taxpayer according to § 28a paragraph 2 ErbStG
The available assets of the taxpayer generally include 50% of the assets that are not beneficiary under § 13b paragraph 2 ErbStG and 100% of the assets that the acquirer already possessed before the inheritance or donation and would not fall under § 13b paragraph 2 ErbStG. For this purpose, the available assets shall be recognised at the common value.
The assets benefiting from § 13b (1) ErbStG and thus excluded from the spare requirements test are:
This article does not replace tax or legal advice in an individual case. Facts, current law, jurisdiction, documentation and implementation remain decisive.