The Inheritance and Gift Tax Act (ErbStG) regulates the taxation of capital transfers due to and through donation. Companies receive special benefits, which are standardized in §§ 13a to 13c ErbStG. The rules allow for a complete tax exemption for business assets and apply equally to sole proprietorships, partnerships and corporations!
Home contents, self-used residential properties and occasional gifts are exempt from inheritance and gift tax – so far, so known. In direct comparison with the tax exemption for business assets of § 13a ErbStG, these exemptions seem almost ridiculous. Because the value of the transferred assets, without affecting the exemption, can amount to up to EUR 26,000,000 here.
The benefit is specifically regulated in §§ 13a to 13c ErbStG. It applies regardless of the type of transfer and thus especially in the case of donations to relatives and third parties. The only decisive factor is that the corresponding conditions are met.
In § 13a (1) sentence 1 ErbStG, the legislature norms that beneficiary property within the meaning of § 13b (2) ErbStG is 85% exempt from inheritance and gift tax (regular exemption). According to § 13a paragraph 10 ErbStG, the 85% exemption is replaced by 100% if the eligible assets according to § 13b paragraph 1 ErbStG consist of a maximum of 20% of administrative assets.
Beneficiary assets? Administrative assets? Admittedly, we also asked ourselves these questions when reading the regulation for the first time. Let us therefore first take a look at § 13b ErbStG, which regulates the requirements of a tax exemption for business assets!
The purpose of the tax exemption for business assets in inheritance and gift tax is the possibility for the transferee to continue the business without additional tax burdens. The complex regulations of § 13b ErbStG are intended to ensure that corporate assets are subject to inheritance tax only if they consist predominantly of assets that are of secondary importance for the actual business activity.
The provision therefore consists of several sub-standards, the fulfilment of the individual facts being a condition for the tax advantage as a whole:
This article does not replace tax or legal advice in an individual case. Facts, current law, jurisdiction, documentation and implementation remain decisive.