In Germany, inheritances are generally subject to inheritance tax. But the super-rich always find ways to reduce the tax burden, even if they have a lot of wealth.
Profit of the super rich
“In principle, every inheritance is subject to inheritance tax. Complete avoidance is not possible by law,” emphasized Carina Freibott from the Wealth Center in Nuremberg to IPPEN.MEDIA. Nevertheless, testators can structure their assets through targeted planning in such a way that taxes for the heirs are minimized.
Dominika Langenmayr is a finance scientist at the University of Eichstätt-Ingolstadt and explains to the FAZ, to which merkur.de refers, that the inheritance tax is a “tax for the poorer rich” because it can have comparatively little impact, especially on very large assets: “In the end, the really rich pay practically no inheritance tax,” she explained her point of view.
Early transfer of assets
A common strategy for saving inheritance taxes is to transfer assets gradually during your lifetime. Donations play “a role in tax planning because you can cleverly choose the time of transfer,” explained the head of the tax and financial policy department at the Institute for Macroeconomics and Business Cycle Research (IMK) of the Hans Böckler Foundation, Katja Rietzler, to merkur.de.
The allowances for gifts correspond to those for inheritances and are renewed every ten years. This allows large assets to be passed on tax-free over longer periods of time. It also makes sense to divide it among several beneficiaries: spouses can receive up to 500,000 euros and children up to 400,000 euros tax-free.
Corporate and foundation structures
There are additional design options for business assets. As merkur.de reports, citing Freibott, the business assets receive tax advantages if the company is continued for a certain period of time. According to the expert, there are two models for this, but they only apply up to business assets of 26 million euros. The tax relief will be gradually reduced for assets between 26 million euros and 90 million euros.
With the standard exemption, companies must continue to operate for at least five years. In addition, the wage bill must reach a minimum level and the testator’s share in the company must be at least 25 percent. The non-operating assets may not exceed 50 percent.
The option exemption, on the other hand, allows up to 100 percent of the tax to be waived if the company continues to operate for seven years. The wage bill should be higher and the proportion of non-essential assets should be lower.
Special regulations and scope for design
A special option for saving taxes is the so-called exemption requirement test. It allows assets between 26 and 90 million euros to be transferred partially or completely tax-free if the heir can prove that they cannot afford the tax on the deadline. Julia Jirmann, tax law consultant at the Tax Justice Network, emphasizes that what really matters is the private assets available on the reporting date. In order to meet this “need”, at least on paper, private-profit family foundations are often founded that have little to no financial resources or make sudden investments running into millions or even billions.
Editorial team finanzen.net
