Digitalisation also offers many new opportunities and projects in the areas of tax consulting, which we are actively pursuing. As part of one such project, we have developed a new consulting approach. It is about succession planning in real estate.
Rising real estate prices with constant tax allowances
In recent years, real estate prices have risen enormously (across Germany by an average of 40% since 2009), while at the same time the inheritance tax allowances have remained constant since 2009 (e.g. 400.000 euros for children). Therefore, in the event of a transfer of inheritance, the allowances are often not sufficient to avoid inheritance tax, and high tax payments can sometimes be due. For this reason, use should be made of the possibility of reusing the inheritance tax allowances every 10 years. With an early or lifetime transfer of assets, in addition to the possible inheritance tax advantage, a secure transfer of assets to the next generation can be achieved. Even if the development of real estate prices may currently be characterized by uncertainty due to the Corona crisis, the problem outlined will remain relevant.
Using the transfer subject to usufruct has many advantages
A transfer of real estate subject to usufruct offers the possibility of continuing to receive the income from the property, but at the same time transferring assets to the next generation and thus making use of the inheritance tax allowances - possibly several times. At the same time, a usufruct has a tax-reducing effect on the value of the gift, so an early transfer makes sense from this perspective too.
New calculation tool creates added value
With the help of our newly developed calculation tool, it is possible to calculate the property values for gift tax purposes precisely and effectively and to take advantage of any possible anomalies. If less of the tax-free allowance is used, you can use it to transfer other assets (e.g. cash donation).
At the same time, in the context of such long-term asset planning, inheritance law aspects must be taken into account in addition to tax aspects and potential problems must be examined in more detail and avoided. In this way, reliable management of assets can be achieved before the inheritance occurs during the lifetime transfer of assets. At the same time, the transferred assets can be protected against access by third parties, for example through clawback clauses and disposal restrictions. The legal framework must be designed according to individual needs, and competent legal advice is guaranteed.
You are welcome to get an initial overview of our new approach at www.reega.de For further information please contact Dr. Rainer Bräutigam or Mr. Mayer.
Dr. Rainer Bräutigam
Tax Consultant
E-Mail: rainer.braeutigam@moore-tk.de
0621/42508-20
Eugen Mayer
Lawyer
E-Mail: mayer@kmbpartner.de
0621/42408-90
