1. | Tax value of the agricultural and forestry assets

– | Exemptions according to § 13 (1) No. 2 and 3 ErbStG

+ | Tax value of operating assets

– | Exemptions according to § 13 (1) No. 2 and 3 ErbStG

+ | Tax value of shares in corporations

Subtotal

– | Exemption according to § 13a ErbStG

+ | Tax value of the residential part and the company dwellings of agricultural and forestry assets

– | Exemptions according to § 13 (1) No. 2, 3 and 4b and 4c ErbStG

– | Exemption according to § 13c ErbStG

+ | Tax value of the property

– | Exemptions according to § 13 (1) No. 2, 3 and 4a to 4c ErbStG

– | Exemption according to § 13c ErbStG

+ | Tax value of the remaining assets

– | Exemptions according to § 13 (1) No. 1 and 2 ErbStG

= Assets accrued after tax values

2. | Tax value of the estate liabilities, unless excluded from the deduction, at least lump sum for inheritance costs (once per inheritance)

= Deductible estate liabilities

3. | Assets accrued after tax values (1.)

– | Deductible estate liabilities (2.)

– | further exemptions according to § 13 ErbStG

= enrichment of the acquirer

4. | Enrichment of the acquirer (3.)

– | tax-free compensation if applicable § 5 (1) ErbStG

+ | Pre-purchases to be added if applicable § 14 ErbStG

– | personal allowance § 16 ErbStG

– | special allowance § 17 ErbStG

= taxable acquisition (to be rounded off to a full hundred euros)

Value of the taxable person

Acquisition (§ 10)

up to and including

... Euro | Percentage in the tax bracket

I | II | 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

The usufruct is a design instrument recognized in civil law. In income tax law and inheritance tax law, many tax design models can also be implemented with the two forms, the reserved usufruct and the grant usufruct. This article provides a comprehensive insight into the current legal situation.

Whoever owns a thing has the right to fruit cultivation. Thus, assets and income are bundled in one person. By appointing a (grant) Usufruct can shift income from the owner to the usufruit owner in order to financially secure family members, to benefit from progression or to make future assets accrue to the next generation for inheritance tax reasons.

If corporate or real estate assets are to be transferred to the next generation as part of the anticipated (company) succession, it is necessary to regularly financially secure the previous owner for life. In contrast to the grant usufruct, the reserved usufruct offers an ideal design instrument here. Through him, the previous owner retains a right to fruit cultivation from the transferred property. With regard to the inheritance and gift tax, the usufruct is also to be attributed a capital value which, as an estate liability, reduces the property tax base.

In the context of this seminar, the civil law foundations of usufruct are first presented. Subsequently, the lecturer discusses the grant and the reserved usufruct in income tax law and inheritance tax law in a more objective and constructive manner.

The usufruct can be ordered on the following assets: