On the FAQ page, you’ll find answers to the most frequently asked questions about our website and our services. Here, you can quickly and easily find information on a variety of topics.
1. Why is Kassuba included in the section on inheritance and gifts?
We specialize in matters related to estate and gift taxes. This includes, in particular, strategic planning solutions designed to prevent or reduce the potential (often substantial) estate or gift tax liability in the context of inheritance or estate planning. This is often still possible even after the death of the decedent. Our clients benefit from our experience and expertise, which we have gained through handling several hundred cases to date.
On average, we have been able to help reduce the impending tax liability by 50–70 percent. Depending on the case, this often results in tax reductions of tens of thousands of euros and, in some instances, tax savings of hundreds of thousands of euros, because we not only utilize tax exemptions and deductions for our clients but also identify and implement additional tax-saving strategies.
2. Who are the clients of the Kassuba Law Firm?
Our clients include individuals, families, family members, relatives of the deceased, and people who are planning their estates. Our clients’ matters range from small estates and inheritances to larger assets. Our clients come from all over Germany. Many of them are willing to travel long distances to visit us in person for a consultation in Bremen.
An increasing number of cases now have an international dimension because the clients themselves reside outside of Germany. Or the assets involved in inheritance or gift transfers are located abroad, such as a house in Spain. Often, the case also has an international dimension because relatives—and sometimes the deceased themselves—live or lived abroad. In such cases, special international tax regulations often apply. We are well-versed in these as well. Tax advisor Hergen Kassuba is also a specialist in international tax law.
3. What is the process if I would like to receive advice from Kassuba?
Step 1: Get in touch
Just give us a call or send me an email. Please briefly let me know what your matter concerns (for example, “inheritance,” “gift,” “inheritance tax return,” “estate planning,” “will drafting,” or similar).
Step 2: Initial consultation
We’ll schedule an appointment to discuss your case. Often, we can answer many of your questions during our first meeting and outline and explain the necessary next steps. I’ll also provide you with a detailed breakdown of our fees in case you decide to hire us.
Step 3: Tax Representation
I will act as your tax advisor in matters of inheritance and gift tax. We ensure the necessary legal certainty and take all necessary steps to secure all available tax benefits. This may include, for example, filing the notice of acquisition or the inheritance tax return. As a rule, our clients do not need to worry about anything else. We handle all correspondence with the tax office, etc. When it comes to tax-optimized estate planning, such as drafting a will, we develop a proposal on how to reduce or avoid potential inheritance or gift taxes.
4. What are the costs for tax consulting?
We will inform you of any potential costs before they are incurred. You can then decide whether you would like to use our consulting services and tax representation.
Our clients know that the benefits of our tax consulting far outweigh the costs. Coming to us is regularly “well worth it,” as we provide the necessary legal certainty. Above all, we can prevent or significantly reduce the threat of high inheritance and gift taxes for many of our clients. The costs of our services are then extremely low in relation to the tax benefits achieved (i.e., the benefits).
Free and non-binding basic analysis: Your initial contact with us is always free of charge and, of course, non-binding, regardless of whether you choose to reach out to us digitally or in person. During this initial contact, we’ll outline the next steps and, as part of our basic analysis, assess how we can assist you and under what terms.
Initial Consultation: During the initial consultation, we can typically address many important questions and, most importantly, outline and explain the next strategic steps. To help you achieve your goals, we’ll conduct a preliminary review of the facts and address the initial legal questions. In most cases, the fee can be agreed upon in advance, and the initial consultation is offered at a fixed price.
Additional Services: Should we provide services for you beyond the initial consultation, our fees for tax-related matters—such as preparing inheritance and gift tax returns—are generally based on the Tax Advisor Fee Regulation (StBVV). Here, too, we can provide you with the fee schedule before we begin working for you. If we have agreed on an hourly rate with you, our fees are based on the actual amount of work involved; the hourly rate is 255 euros plus 19% sales tax.
5. What is the inheritance tax?
Inheritance tax is levied on the transfer of assets from a deceased individual to their heirs. In general, all inheritances in Germany are subject to tax. However, there are exceptions!
6. What does the inheritance tax exemption mean?
Legally established tax-exempt allowances allow individuals to inherit up to a certain amount tax-free. However, only spouses and certain relatives are eligible for these allowances.
7. What is the inheritance tax exemption amount?
Degree of Kinship | € |
Spouse and registered domestic partner | 500.000 |
Children born in and out of wedlock, adopted children, stepchildren, and children of deceased children | 400.000 |
Grandchildren and children of stepchildren | 200.000 |
Other descendants, parents (heirs) | 100.000 |
Individuals in tax bracket II (e.g., siblings, nephews, nieces) | 20.000 |
Individuals in tax bracket III | 20.000 |
8. How much is the inheritance tax, and how is it calculated?
The amount of inheritance tax generally depends on the value of the inheritance or estate and the tax bracket assigned to the respective beneficiary. Depending on the circumstances, tax exemptions may also apply, which can reduce the inheritance tax or even result in no inheritance tax being due at all. Tax benefits must also be taken into account. Simply put, inheritance tax is calculated based on the estate value, tax bracket, and tax exemption.
9. How is the value of the estate determined?
The estate value is a key factor in calculating the amount of inheritance tax. The estate value consists of the decedent’s assets. The decedent’s liabilities (primarily debts) are deducted from this amount. The valuation date is the date of the decedent’s death.
This raises the question of exactly how to calculate one’s assets. Cash assets (cash and bank deposits) are still relatively easy to determine. It becomes more difficult when determining the value of stocks and securities. The value of real estate or agricultural or forestry assets is also often not easy to determine. Furthermore, it is often difficult and time-consuming to value inherited business assets or inherited shares in a corporation.
This is where the right to value assets comes into play. We strongly recommend seeking expert assistance to ensure that individual assets are valued in a tax-efficient manner.
10. Which tax bracket applies to whom?
Tax classes are determined by the personal relationship between the beneficiary and the decedent. Generally speaking, the closer the beneficiary’s relationship to the decedent, the more favorable the beneficiary’s classification in the respective tax class. The tax classes are governed by Section 15 of the Inheritance Tax Act.
Here is how the tax brackets are structured:
Tax bracket I:
– the spouse and domestic partner
– the children and stepchildren
– the descendants of the children and stepchildren (i.e., grandchildren, great-grandchildren, etc.)
– the parents and grandparents (i.e., grandparents and great-grandparents), but only in the event of inheritance, as they are otherwise classified in tax bracket II
Tax bracket II:
– parents and grandparents, unless they are in tax bracket I
– siblings
– first-degree descendants of siblings (i.e., nieces and nephews)
– stepparents
– children-in-law
– parents-in-law
– a divorced spouse and the partner in a dissolved civil partnership
Tax bracket III:
– All other purchasers and the donations for specific purposes
11. What tax rates apply to which tax bracket?
Inheritance tax is levied at the following rates (percentages) for each tax bracket:
Value of taxable income | StKl. I, 2. | StKl. II | StKl. III |
bis 75.000 € | 7 % | 15 % | 30 % |
bis 300.000 € | 11 % | 20 % | 30 % |
bis 600.000 € | 15 % | 25 % | 30 % |
bis 6.000.000 € | 19 % | 50 % | 30 % |
bis 13.000.000 € | 23 % | 35 % | 50 % |
bis 26.000.000 € | 27 % | 40 % | 50 % |
über 26.000.000 € | 30 % | 45 % | 50 % |
12. Who is liable for inheritance tax or gift tax?
In the event of an inheritance, the heirs—as well as legatees and beneficiaries entitled to a compulsory share—are generally liable for inheritance tax.
In the case of a gift, the donee and the donor themselves are liable for the tax.
13. When are heirs required to file an inheritance tax return?
Heirs are only required to file an inheritance tax return if the competent tax office requests that they do so. This request will be made if an inheritance tax assessment is expected. For this reason, the tax office needs information about the value of the inherited or gifted assets.
14. Is it necessary to provide information to the tax office without being asked?
Yes!
Any acquisition subject to inheritance tax must be reported to the competent tax office by those who have received property through death or gift within three months of becoming aware of it. In the case of gifts, the donors are also required to file a report.
Banks are also required to notify the tax authorities of the death of a testator, the balances of any accounts and securities holdings maintained at the bank, and the existence of any safe deposit boxes.
Even if the acquisition involves real property, business assets, or shares in corporations that are not already subject to specific other reporting requirements or are located abroad, the reporting requirement still applies.
No!
A declaration need not be filed if the acquisition is based on a “disposition of property upon death” opened by a German court or notary (or a German consul) or on a judicially certified gift, and the disposition clearly establishes the relationship between the acquirer and the decedents.
15. What are the consequences of failing to report employment?
Criminal:
The contents of a notice of acquisition are regulated in detail by the Inheritance Tax Act. If the transferees fail to file the notice of acquisition, it must be determined whether the failure to file the notice resulted in the failure to assess inheritance tax or gift tax. In such a case, the transferees may, under certain circumstances, be liable to criminal prosecution for tax evasion.
Without consequences:
If the acquisition remains entirely tax-exempt, the failure to report the acquisition will not result in any penalty.
16. Should a voluntary disclosure be filed to avoid criminal liability?
Yes, if a failure to report income has resulted in the tax not being assessed, a voluntary disclosure—provided certain other legal requirements are met—may lead to immunity from penalties.
17. When does the obligation to pay inheritance tax expire?
The legal provisions governing inheritance tax are highly problematic, and heirs can easily find themselves in a difficult situation. Some heirs believe they can avoid liability by relying on the statute of limitations. However, upon closer legal examination, the statute of limitations is often longer than assumed.
The assessment period for inheritance tax is generally four years (Section 169(2), Sentence 2 of the German Fiscal Code). Once the assessment period has expired, the tax office may no longer assess inheritance tax.
It is essential to note that the assessment period does not begin in the year in which the inheritance occurred (the death of the decedent). Rather, pursuant to § 170(2) of the German Fiscal Code, the period begins only in the year in which the notice of acquisition or the inheritance tax return was filed with the tax office, at the latest upon the expiration of the third calendar year following the year in which the tax became due.
In addition, there is a special provision under which the assessment period does not begin to run until the heir has become aware of the inheritance.
Was the inheritance or the extent of the inheritance concealed from the tax office in a manner constituting a criminal offense? Even in such cases, the start of the statute of limitations for assessment is postponed depending on the specific circumstances. In cases of reckless tax evasion, the statute of limitations for assessment is extended to five years, and in cases of tax evasion, to ten years.
18. How is the value of real estate assessed?
When it comes to real estate valuation, the Inheritance Tax Act refers to Section 12 of the Valuation Act. Among other factors, the valuation depends on whether the property is developed or undeveloped. For example, the income approach can be applied to rental residential properties, while the cost approach is used for properties for which there are no comparable values.
If heirs can demonstrate, based on an expert appraisal, that the value of the property is lower than the value determined under the Valuation Act, the lower value must be used in the tax calculation.
19. How is the value of stocks or a stock portfolio correctly determined?
Securities traded on a German stock exchange must be valued at the time of death using the lowest quoted daily price. If no stock market prices can be determined, the fair market value must be determined in accordance with the Valuation Act.
20. When do I need to file an inheritance tax return?
An inheritance tax return must be filed only upon request by the tax office. This is governed by Section 31 of the Inheritance Tax Act. Therefore, if the tax office does not request that a tax return be filed, it is not required to be filed.
21. Who is required to file an inheritance tax return?
The tax office is entitled to receive an inheritance tax return from anyone who may be required to pay the tax. This means that the heir, the legatee, or the beneficiary of a statutory share may all be required to file a tax return.
22. What are the potential criminal consequences of failing to file an inheritance tax return as required?
Anyone who knows they are required to pay inheritance tax but believes they can conceal the inheritance—and especially its value—from the tax authorities must expect severe consequences. In the event of tax evasion, a prison sentence of six to ten years may be imposed, pursuant to Section 170(3) of the German Fiscal Code.
23.What can you do to get back into good standing with the tax authorities?
Anyone who has evaded inheritance tax may (as long as the offense has not yet been discovered) file a voluntary disclosure to avoid criminal charges. In addition, the unpaid tax must, of course, be paid retroactively.
24. Can I deduct the fees paid to a tax advisor for preparing the inheritance tax return?
Yes. The fees charged by a tax advisor for preparing a tax return are deductible (Section 10(5)(3) of the Inheritance Tax Act).
Please note that this deduction does not apply to costs incurred as a result of subsequent appeals or court proceedings.
25. Which tax office is responsible for me?
Here you will find a list of the forms required for the administration of estate tax—
and the tax offices responsible for gift tax.
Link to the directory