inheritance in home country - taxes in Germany?

As far as I know, inheritance law of your residence country usually applies. Thus you'd have to pay German inheritance tax.
But better check with a good tax consultant experienced in such matters!

Like Beppi mentioned, you will come under German inheritance laws - no matter where the money comes from.

The biggest factor is who the money comes from. ( I assume property will be calculated on a fair market value; neither forced to be sold nor exempted) There is a certain amount un-taxed - above which is taxed. Again the percentage of tax depends on both the levels and relationship.

But the free amount from a spouse for example is 500 thousand Euros, 400 thousand from a parent, 200 thousand from a grandparent - but just 20 thousand from other relatives like a uncle, cousin or sibling. And say a parent inherits from a child, the other way around than is standard, it is also just 20 thousand. Seems I mentioned subject this in a previous thread, but some years back, and it has all been modified in the meantime.

The important word to Google is "Erbschaftsteuersätze".

Here is a link, German only, that not only explains it all but has a calculator function to figure it out. It has tables showing the un-taxed amount for each relationship class and a chart of the percentages depending on this relationship and the amount inherited. (Note that in my statement above I have had to turn around the table to show who it comes from rather than as it is expressed as whom it goes to.)

https://www.steuerklassen.com/erbschaft … teuersatz/

Erbschaftssteuerklasse    Verwandtschaftsgrad    Steuerfreibetrag in Euro
1    Ehepartner (auch gleichgeschlechtlich)    500.000
1    Kinder, Stiefkinder, Enkel von verstorbenen Kindern    400.000
1    Enkel    200.000
1    Sonstige Personen    100.000
2    Eltern, Voreltern, Geschwister, Nichten, Neffen, Stiefeltern, Schwiegerkinder, Schwiegereltern, geschiedene Ehepartner    20.000
3    Sonstige Personen    20.000

Erbschaft in Euro    Steuersatz in Klasse 1 in Prozent    Steuersatz in Klasse 2 in Prozent    Steuersatz in Klasse 3 in Prozent
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
Mehr    30    43    50

Have to add that while one residing in Germany is liable for potential inheritance taxes no matter where the money comes from, this does NOT mean the country of origin might not tax it as well. Double taxation is possible. Depends on the country.

I inherited some money years ago from the USA and from my understanding, it was taxed before ever paid out. So I didn't have to pay anything to them on what I got, they had already taken whatever might have been due up front.  And indeed, in the USA there is a extremely high threshold before any inheritance taxes are usually due - but it is way lower if the recipient is overseas. But any pay-out is after taxes.

Thank you very much, both!

Tom, that is very explanatory and the link will be helpful. I got my inheritance from my father and is definitely lass than 400K. I'll check my home country for the taxes there as well.

Thanks again.

Happy to help but very nice to hear some appreciation. Would also add for readers here that if one gets assets gifted to them by a relative rather than as an inheritance, it will usually be treated in Germany as an early inheritance.

So say an uncle sends one 10,000 Euros as a one-time gift. It won’t be taxed as income but rather seen as an early inheritance. Say 5 years later the uncle dies and leaves one 20,000 Euros. The total will be 10,000 over the allowed tax free amount and Germany would impose an inheritance tax. But, unless the information on this has changed in the meantime, the inheritance would come more than 10 years later, one would still have the full 20,000 in additional to the earlier 10,000 all tax free.

This is good to know but one should that a onetime such situation will not necessarily trigger close scrutiny; it is also a thing that some people have tried to misuse – by concealing income as inheritance or such a gift. But obviously officials are going to get suspicious if one keeps “inheriting” or a regular basis especially for large amounts.

Please also note, in this context, that all transfers into Germany of €12500 or more must be declared to the authorities - and in case of spot-checks (which are more likely for large amounts) or suspicious looking transactions, you should be able to provide them, on request, proof of the source and reason for the transfer. If not, it could be confiscated!

beppi wrote:

Please also note, in this context, that all transfers into Germany of €12500 or more must be declared to the authorities - and in case of spot-checks (which are more likely for large amounts) or suspicious looking transactions, you should be able to provide them, on request, proof of the source and reason for the transfer. If not, it could be confiscated!

I though the limit was 10,000 Euros, which is the same one can cross the border with, without declaring it...Has the amount changed recently?

The amount has changed to 12500€.
https://www.bundesbank.de/resource/blob … n-data.pdf

beppi wrote:

The amount has changed to 12500€.
https://www.bundesbank.de/resource/blob … n-data.pdf

OK, changed in Jan. 2021, I hadn't heard this yet, good to know!