GERMAN FEDERAL INHERITANCE AND GIFT TAX RATES AND EXEMPTIONS
by Dr. Peter K.-D. Barandt, Attorney at Law (New York),
Attorney at Law (Rechtsanwalt) (Frankfurt),
Bar-Approved Specialist in Tax Law (Frankfurt),
M.B.A. (U. of Cologne), LL.M. (SMU, Dallas, Texas)

Dr. Peter K.-D. Barandt
Rechtsanwalt (Frankfurt)
Attorney at Law (New York)
An den Pappeln 14
60388 Frankfurt / Germany
Phone (from U.S.)
011 49 6109 33081
Fax (from U.S.)
011 49 6109 31552
BarandtLaw@Barandt.com
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For Class One (“Steuerklasse I”) recipients, i.e. surviving spouses, registered same-sex life partners (“Eingetragene Lebenspartner”), surviving children, stepchildren and grandchildren, surviving parents and grandparents, the federal exemption amounts (“Persönliche Freibeträge”) are 500,000.00 Euros + 256,000.00 Euros in the case of a surviving spouse or a registered same-sex life partner, 400,000.00 Euros in the case a surviving child, a stepchild or a grandchild (parents predeceased), 200,000.00 Euros in the case of a surviving grandchild (parents surviving), and 100,000.00 Euros in the case of parents and grandparents.
For Class Two (“Steuerklasse II”) recipients, i.e. siblings, nieces, nephews, divorced spouses, step parents, parents-in-law and children-in-law, the personal exemption amount (“Persönlicher Freibetrag”) is 20,000.00 Euros.
Class Three (“Steuerklasse III”) is the “catch-all” class of inheritance (estate) taxpayers covering all other recipients at a personal exemption amount (“Persönlicher Freibetrag”) of 20,000.00 Euros and at inheritance tax rates ranging from 30 through 50 percent.
The application of the aforementioned personal exemption amounts (“Persönliche Freibeträge”) is dependent on that either the decedent or the beneficiary has had a residence in Germany at the time of decedent’s death.
Otherwise, the foregoing personal exemption amounts (“Persönliche Freibeträge”) of 500,000.00 Euros + 256,000.00 Euros, 400,000.00 Euros, 200,000.00 Euros, 100,000.00 Euros and 20,000.00 Euros will be granted on a pro rata basis only, namely in the ratio of the net worth of the German estate assets versus the net worth of the total worldwide estate assets.
In the latter case, however, of both the decedent and the beneficiary being non-residents in Germany, German inheritance tax will be imposed only on certain listed qualified assets located in Germany, such as business assets, real property, etc.
For better optical reference, all foregoing remarks will be summarized in a synopsis and diagram format below:
CURRENT 2019 PERSONAL EXEMPTION AMOUNTS |
|||
Tax Class |
Relationship of Heir/Beneficiary/ Recipient with Decedent |
Personal Exemption Amount in Euros |
|
One | Spouse, registered same-sex life partner Child, stepchild, grandchild (if parents predeceased) |
500,000 + 256,000 400,000 |
|
Grandchild Parents and grandparents (if inheritance, not gift) |
200,000 (grandchild) 100,000 (parents and grandparents) |
||
Two | Parents and grandparents (if gift, not inheritance), sibling, niece/nephew, divorced spouse, stepparents, parents-in-law/children-in-law |
20,000 | |
Three | All other | 20,000 | |
All Tax Classes | Decedent and beneficiary with no German residence at time of decedent´s death | The foregoing exemption amounts in the percentage of German assets vs. total worldwide assets |
All personal exemption amounts (“Persönliche Freibeträge”) except as stated otherwise above are unified both for German Federal Inheritance (Estate) Tax (“Erbschaftsteuer”) and for German Federal Gift Tax (“Schenkungsteuer”).
CURRENT 2019 GERMAN INHERITANCE (ESTATE) AND GIFT TAX RATES |
|||
Net Worth of Inheritance (exceeding personal exemption amount) up to and including |
Inheritance Tax Rate in Percent | ||
Class One |
Class Two |
Class Three |
|
75,000 Euros |
7 | 15 | 30 |
300,000 Euros |
11 | 20 | 30 |
600,000 Euros |
15 | 25 | 30 |
6 million Euros |
19 | 30 | 30 |
13 millionEuros |
23 | 35 | 50 |
26 million Euros |
27 | 40 | 50 |
over 26 million Euros |
30 | 43 | 50 |