The German Growth Opportunities Act amends the German Inheritance Tax and Gift Tax Act by inserting the words "or includes a claim to the transfer of domestic assets within the meaning of section 121 of the Valuation Act" after the word "exists" in section 2 (1) no. 3 sentence 1 of the Inheritance…

The Annual Tax Act 2024 amends the rules on the taxation of a lifetime benefit from a foreign tax-priviledged retirement account /  pension plan. § Section 22 no. 5 is amended as follows: a) In sentence 2, the words "Section 3 no. 66 and" are replaced by the words "Section 3 no. 66," and…

In its ruling dated March 23, 2023 - 1 K 2478/21 E, the Münster Tax Court (Finanzgericht Münster) decided that the assets distributed upon the termination of a "non-transparent" US trust may be taxable under § 20 (1) No. 9 sentence 2 in conjunction with sentence 1…

The German Federal Fiscal Court (BFJ) has held, that the legacy (Vermächtnis) of a domestic property (Inlandsvermögen) is not subject to limited inheritance tax liability (beschränkte Erbschaftsteuerpflicht). See Judgement of the Federal Fiscal Court dated 23.…

The German Federal Fiscal Court (BFH) ruled on September 20th 2022 (file number: II B 2/22, NV) that the Germany-U.S. Estate and Gift Tax Treaty does not prevent Germany from imposing German inheritance tax (Erbschaftsteuer) on a U.S. citizen beneficiary who is a German tax…

The general tax-free exemption (Freibetrag) has not been changed as of Jan. 1, 2023, and thus remains unchanged since 2019. However, it is expected that the allowance will be increased by approx. 25% in 2023 to compensate for the depreciation of money since 2019.  For additional information…

IIn its judgment dated June 29, 2022 (Case No. IV ZR 110/21), the Federal Court of Justice upheld the decision of the Cologne Court of Appeal. The Cologne Court of Appeal had previously held in its judgment of April 22, 2021, file no. 24 U 77/20, that English law regarding the compulsory…

In its decision dated June 25, 2022, file no. II R 31/19 the German Federal Fiscal Court (Bundesfinanzhof) held that distributions from a Foreign pool of assets with the purpose to bind assets (Vermögensmasse ausländischen Rechts, deren Zweck auf die Bindung von Vermögen…

The German Federal Fiscal Court (Bundesfinanzhof) has held in its judgment of June 25, 2021, file number II R 13/19, that assets in a trust to which the grantor has reserved comprehensive powers are to be considered owned by him for inheritance and gift tax purposes. Substantive excerpts from the…

The Cologne Court of Appeal has held in its judgment of April 22, 2021, file no. 24 U 77/20, that English law regarding the forced share is not applicable due to a violation of German public policy if a UK national (with the closest connection to England) with habitual residence in Germany elects…

1) Distributions from a 401(k) are other income pursuant to Section 22 No. 5 Sentence 1 of the German Income Tax Act (Einkommensteuergesetz, EStG). 2) Pursuant to Sec. 22 No. 5 Sentence 2 EStG, the income is taxable in the amount of the difference between the contributions and the distributions,…

(1) German courts have jurisdiction to order the curatorship of the estate of assets located in Germany of a testator who died with his last habitual residence abroad. 2 The ordering and supervision of the curator of the estate (Nachlasspfleger) shall be governed by German substantive…

Personal Tax-free Exemption for 2021: The personal tax-free exemption (Freibetrag) depends on the familial relationship between deceased and beneficiary. In case of unlimited tax liability (unbeschränkte Steuerpflicht)  - the following tax free exemptions apply…

The U.S. Treasury provided clarity for estate planners and their clients by issuing regulations that confirm that individuals who make gifts now seeking to benefit from current exclusion levels (basic exclusion amount of $11.4 for 2019) will not be adversely impacted after 2025 should the exclusion…

Effective January 1, 2020, the use of IRAs as an instrument for passing a stream of income tax free or tax deferred withdrawals will be limited to ten years. Prior to the changes passed in Congress’s spending package, an IRA owner could pass on his/her withdrawals to a young beneficiary which…

On March 6, 2019 the Ministry of Finance of Brandenburg published a binding decision on the taxation of distributions from a U.S. trust subsequent to electing the right under Art. 12 para 3 of the Germany-U.S. Estate and Gift Tax Treaty. The decision was rendered after the Ministry conferred…

In its decision dated July 3, 2019, the German Federal Fiscal Court (Bundesfinanzhof) held that distributions from a foreign family foundation (ausländische Familienstiftung) to an individual which has a fiscal residence in Germany are subject to German gift tax (Schenkungsteuer) under §…

Personal Tax-free Exemption for 2019: The personal tax-free exemption (Freibetrag) depends on the familial relationship between deceased and beneficiary. In case of unlimited tax liability - the following tax free exemption applies (see § 15 ErbStG and § 16 ErbStG):…

The German inheritance tax rates depend on a) the tax class and b) the value of the taxable acquisition of the beneficiary. Determination of the German Inheritance Tax Class for 2019 The inheritance tax class depends on the familial relationship between the deceased and the…

In its decision dated August 9, 2018, the Fiscal Court of Cologne (Finanzgericht Köln) held that for German residents taxation should be limited to the difference between the contributions to a 401(k) and the distributed amount from the 401(k) assuming that the contributions were not…

The Tax Court of North Rhine-Westphalia (Finanzgericht Münster) has held on 12 April 2018 , that German inheritance tax (Erbschaftsteuer) cannot be avoided or reduced by a deed of variation (under British law) as the German inheritance tax is triggered by the death (and not the…

On December 22, 2017, Public Law 115‑97 ("Tax Cuts and Jobs Act") was enacted. Sec. 11061 of the Act more than doubles the estate and gift tax exemption amount for decedents dying or gifts made after December 31, 2017, and before January 1, 2026, by increasing the basic exclusion amount…

The General Tax-free Exemption and Tax Rates of the German Inheritance Tax 2017: The personal tax-free exemption (§ 16 ErbStG) and the Tax Rates (§ 19 ErbStG) remain unchanged.  Tax-free Exemption in Case of Situs Taxation: : In case of situs taxation, the tax-free exemption…

Federal Estate Tax: The estate tax exclusion for 2017 has been raised from $5.45 million for individuals and $10.9 million for married couples in 2016to $5.49 million for individuals and $10.98 million for married couples in 2017. (See IRC §2001) The maximum estate tax rate applied to…

The case involved a German national, Mr. Topsnik. Mr. Topsnik was born in Germany and moved to the U.S. obtaining a green card and residency status in 1977.  Mr. Topsnik started a business with its principal place of business in California and purchased a home in Hawaii during the…

The IRS has issued regulations pursuant to the Protecting Americans from Tax Hikes Act (“PATH”) that make changes to the income tax withholding requirements for nonresident aliens when U.S. situs property is liquidated. While foreign individuals are generally exempt from capital gains…

The increase in the estate tax threshold to $5.25 million has significantly decreased the estates captured by the U.S. estate tax. The IRS reported that in 2012 at which time the estate tax threshold was $5.12 million only 9,400 estate tax returns (Form 706) were received. Nevertheless, for the…

This summer we reported on the Advocate General’s opinion on the matter Yvon Welte v. Finanzamt Velbert. The matter concerns the question as to whether Articles 56 [EC] and 58 [EC] should be interpreted as precluding German national legislation on inheritance tax under which, in cases where…

On 19.6.2013 the German Federal Tax Court held that the guarantee of property does not require Germany to credit foreign inheritance tax levied by a foreign country on a claim due from a foreign bank against domestic inheritance tax payable on that claim. Surprisingly, the…

New probate rules and the Wills, Estates and Succession Act (WESA) will come into force officially on March 31, 2014.

Victoria (Australia): Succession Law Reform Act Submissions for this inquiry closed on 28 March 2013. Submissions will be published on this site in late April. The Commission has been asked by the Attorney-General to conduct a review of the laws of succession. The Victorian review follows a…

Draft Inheritance and Trustees’ Powers Bill Overview: Introduction: Consultation on the draft Inheritance and Trustees’ Powers Bill. This Bill gives effect to the recommendations in parts 2–7 of the Law Commission’s report, Intestacy and family provision claims on…

The German Federal Tax Court (Bundesfinanzhof) has ruled on September 27th 2012, that distributions from a US trust to beneficiaries domiciled in Germany are subject to German gift tax ((reference: 2012 – II R 45/10) unless the beneficiary is the settlor himself.  The decision is…

From Monday 21 January 2013, all probate notices must be published on the Online Registry website.

The tax compromise between President Obama and the Congress that avoided the fiscal cliff in early January maintained the $5million estate tax and generation-skipping transfer (“GST”) exemption at $5million.  The per-person exemption will be indexed for inflation and will change…

The German Upper House of Parliament has rejected a tax treaty designed to legalize undeclared assets held by German nationals in Swiss banks. The German Social Democrats and the Greens united to reject the accord on the grounds that the accord has significant loopholes and is contrary to notions…

On November 6, 2012, Barack Obama was re-elected president of the U.S. and the democrats recaptured the Senate. The election results effectively ensure that the Affordable Care Act (“ACC”) will be implemented.  The ACC imposes obligations that most individuals maintain health care…

The European Commission has decided to refer Germany to the EU's Court of Justice because of its legislation on inheritance and gift tax allowances. Under German law, there is a higher tax exemption for inherited German property if the testator or the heir are living in Germany, than if they are…

The European Commission has decided to refer Germany to the EU's Court of Justice because of its legislation on inheritance and gift tax allowances. Under German law, there is a higher tax exemption for inherited German property if the testator or the heir are living in Germany, than if they are…

Regulation (EU) No 650/2012 of the European Parliament and of the Council of 4 July 2012 on jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and on the creation of a European Certificate of…

On July 25, 2012, the U.S. Senate voted on a bill to extend income tax cuts that expire December 31, 2012. Unfortunately, the bill failed to address the estate tax. The vote was along party lines and Democrats sidestepped the estate tax, which currently allows for an individual exemption of $5.12…

On July 26, 2012, the U.S. Department of the Treasury published a model intergovernmental agreement to implement the Foreign Account Tax Compliance Act (“FATCA”). FATCA targets non-compliance by U.S. citizens and residents using foreign accounts. The agreement was developed in…

Legislation of a Member State, such as that at issue in the main proceedings which, for the purposes of calculating inheritance tax, excludes the application of certain tax advantages to an estate in the form of a shareholding in a capital company established in a third country, while conferring…

Switzerland and France have recently initialled a revised bilateral agreement between the two countries for the avoidance of double taxation in the field of inheritance and estate taxes. The revised agreement will replace the agreement dating from 1953.
As a result, the inheritance tax imposed…

HM Treasury has set out its plans to reform the definition of tax residence in the light of last year's consultation.
Comments: Inheritance tax (IHT) liability will not be affected. Liability to inheritance tax (IHT) is mainly determined by an individual’s domicile status rather than…

A first-time comprehensive Double Taxation Convention between the UK and the Principality of Liechtenstein was signed in London on 11 June 2012 by David Gauke MP, Exchequer Secretary to the Treasury and Dr Klaus Tschütscher, the Prime Minister of Liechtenstein. Together with the Third Joint…

Today, the Commission's proposal to simplify the settlement of international successions received the final backing of the Council of Justice Ministers of the EU. The European Commission proposals will ease the legal burden when a family member with property in another EU country passes away. Once…

On May 3, 2012, California’s tort law became aligned with the majority of U.S. states in recognizing the tort of intentional interference with expected inheritance (“IIEI”). The California Court of Appeal, Fourth Appellate District, in the case Beckwith v. Dahl, held that IIEI is…

Beginning on December 21, 2012, US financial institutions will be required to report to the IRS interest payments made to certain nonresident alien individuals. The new regulations were enacted in concert with the Foreign Account Tax Compliance Act, which provides for a greater exchange of tax…

The Supreme Court of Canada (SCC) released its unanimous decision in a case involving how a trust’s residency for tax purposes should be determined. The court held that the principal basis for imposing income tax in Canada is residency.  As with corporations, the residence of a trust…

Reference for a preliminary ruling from the Finanzgericht Düsseldorf (Germany) lodged on 18 April 2012 — Yvon Welte v Finanzamt Velbert (Case C-181/12) Finanzgericht Düsseldorf Parties to the main proceedings Applicant: Yvon Welte Defendant: Finanzamt Velbert Question…

UK government intends to increase the IHT-exempt amount that a UK-domiciled individual can transfer to their non-UK domiciled spouse or civil partner. The government similarly intends to allow individuals who are domiciled outside the UK and who have a UK-domiciled spouse or civil partner to elect…

The European Parliament has today granted its support to a proposal for new rules that will allow succession cases connected to several Member States to be settled by one authority and under one set of rules. This regulation, once passed, will establish the rule, that the law of the last permanent…

The U.S.A, France, Germany, Italy, Spain and the United Kingdom have signed a Joint Statement regarding an Intergovernmental Approach to Improving
International Tax Compliance and Implementing FATCA.

Federal Constitutional Court - Press office -
Order of 21 July 2010 – 1 BvR 611/07, 1 BvR 2464/07 – Unequal Treatment of Marriage and Registered Civil Partnerships in
Gift and Inheritance Tax Act Unconstitutional Pursuant to the provisions in §§ 15, 16, 17, and 19 of…

Pursuant to Assembly Bill 1305 fewer estates will be subject to probate in California come January 1, 2012. The legislation, signed by Governor Jerry Brown in July 2011, increases the maximum value of estates that are subject to court supervised probate. The maximum value of an estate to avoid…

The Internal Revenue Service today reopened the offshore voluntary disclosure program to help people hiding offshore accounts get current with their taxes and announced the collection of more than $4.4 billion so far from the two previous international programs. The IRS reopened the Offshore…

Whether or not the deceased left a will, certain family members and dependants may apply to court for reasonable financial provision from the estate, under the Inheritance (Provision for Family and Dependants) Act 1975 (“the 1975 Act”). This is often referred to as a claim for family…

Deputy Prime Minister Saenz de Santamaria announced the plan to crack down on tax cheats. In the future, Spain will scrutinize tax returns more closely and increase coordination with revenue agencies in Spain's autonomous regions and "tax havens" such as Andorra, Panama, the Bahamas and the…

Germany has started to create a central will registry which is managed by the chamber of German notaries ("Bundesnotarkammer"). The will registry is currently digitalizing information provided by the German civil registers that are currently responsible to inform German probate courts that a…

Brussels, 15 December 2011 - EU citizens that inherit foreign property are frequently faced with a tax bill from more than one Member State. In fact, in extreme cases the total value of a cross-border inherited asset might even have to be paid in tax, because several Member States may claim…

A new Wills and Succession Act (WSA) was passed by the Alberta Legislature in Fall 2010. A year has been set aside to allow for preparation and education before the Act becomes law. Once in force, it will have significant impact on wills and succession practice in Alberta. The WSA is…

German Law on inheritance and gift tax: New regulations for situs taxation in force
Pursuant to Section 16(1) of the German Law on inheritance and gift tax (Erbschaftsteuer- und Schenkungssteuergesetz) a taxpayer is entitled to acquire up to €500 000 tax-free depending on the degree of…

The European Commission has formally requested Germany to amend its inheritance tax and gift tax legislation which discriminates against residents of other EU Member States in breach of EU law on the free movement of capital. The Commission's request takes the form of a "Reasoned Opinion" (second…

The ECJ has held that the § 16 of German inheritance and gift tax law breaches the provisions on the free movement of capital contained in article 56 of the EC Treaty. Under German tax law, a tax exemption on gifts of up to €500 000 is granted to German residents (depending on the degree…

On 12 February 2009, the European Court of Justice (ECJ) held that the free movement of capital does not require a Member State (MS) to credit foreign inheritance tax levied by another MS on a claim due from a foreign bank against domestic inheritance tax payable on that claim. Background
Ms…

The German Government has issued a consolidated version of the "Convention between the Federal Republic of Germany and the United States of America for the Avoidance of Double Taxation with respect to taxes on estates, inheritances, and gifts."