In the case of an inheritance (or gift), the transferred property is in many cases fully subject to tax. This means that a valuation must be carried out for the property in accordance with the Valuation Act and this is fully included in the assessment basis. If the exemption amount (depending on the personal status between the donor/testator and the transferee) is exceeded, gift or inheritance tax is payable in the corresponding amount.
Family home regulations are generally very beneficial
The legislator deviates from these principles in specific cases, which always concern the so-called "family home". The purpose of the regulations is to avoid an inheritance tax burden on the testator's own home if, for example, the spouse survives and is appointed as sole heir. It is always assumed that there can only be one family home for each donor/testator. A total of three exemption regulations can be distinguished, which are briefly summarized in the table below:
Ultimately, these regulations mean that the family home is completely exempt and does not reduce the tax-free allowance, for example. It is therefore advisable to keep an eye on the use of this regulation in the context of testamentary provisions.
Observe restrictive case law on preferential treatment
Nevertheless, it should be noted that the case law of the Federal Fiscal Court has recently interpreted the provisions on family homes very restrictively. A violation can lead to the retroactive denial of the exemption provision and accordingly trigger inheritance tax (plus interest). Of relevance
are in particular the following judgments:
Due to the very narrow interpretation of the term “family home” by the Federal Fiscal Court, there is a risk in many cases that these requirements will be met over a long period of time,
10 years. Due to the generally increased property prices (which also affect the value of the family home), when considering
the possible tax consequences must always be kept in mind.
Dr. Rainer Bräutigam
Tax Consultant
rainer.braeutigam@moore-tk.de
0621 42508-20
