Tax Clearance Certificate
for Legal Heirs in Germany

Tax Clearance Certificate
for Legal Heirs in Germany

If you are a foreign heir who has inherited German assets, having a tax clearance certificate, or “Unbedenklichkeitsbescheinigung” (a “certificate of non objection”) is required to allow the banks to transfer those assets abroad. The Undebenklichkeitsbescheinigung is usually sent by the German tax authorities to the respective banks. This action allows the inheritance to be given to the executor and beneficiaries. To gain this tax clearance certificate, the executor or the heirs must submit the required paperwork and pay applicable German inheritance tax.

At Schlun & Elseven Rechtsanwälte, our legal team is ready to advise and support you regarding the Unbedenklichkeitsbescheinigung.

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Our lawyers advise clients worldwide in matters of German probate law and inheritance tax requirements.

Inheritance Tax in Germany: Legal Advice

The inheritance law team at Schlun & Elseven Rechtsanwälte is ready to advise you with inheritance tax in Germany. Inheritance tax rates apply on a federal level and relate to the deceased’s valuable assets, savings, and property. The inheritance tax rate used is based on the heir’s relationship to the deceased, with close relations such as spouses and children paying less in tax than those more distantly related.

There are three groups of relationships, and the tax rate applied, and tax-free allowances are based on these categories.

Group 1:

  • Spouse/civil partner
  • Children – including adopted children and stepchildren
  • Grandchildren
  • Parents and ancestors

Group 2:

  • Siblings
  • Relatives by marriage, such as sons and daughters in law, step-parents and parents-in-law
  • Divorced spouses

Group 3:

  • Friends and others

There are differences within the groups regarding the tax-free allowance applicable. Spouses, for example, have a tax-free allowance of up to €500,000, while children, stepchildren, grandchildren/great-grandchildren have a tax free-allowance of €400,000. On the other hand, parents and grandparents have a tax-free allowance of €100,000. All these relationships belong in Group 1 but still have significant differences in the tax-free allowance. In Groups 2 and 3, such as siblings, relatives by marriage and friends, the tax-free allowance is €20,000.

The groups above also determine the inheritance tax rate applicable in the case. Inheritance tax in Germany varies from 7% to 50% and is based on the inheritance value. Those in Group 1 pay a lower rate of inheritance tax than those in the other groups consistently.

Value of Inheritance Group-1 Group-2 Group-3
Up to €75,000 7% 15% 30%
€75,000–€300,000 11% 20% 30%
€300,000–€600,000 15% 25% 30%
€600,000–€6,000,000 19% 30% 30%
€6,000,000–€13,000,000 23% 35% 50%
€13,000,000–€26,000,000 27% 40% 50%
More than €26,000,000 30% 43% 50%

To outline how this table works, we can use the following example: The deceased’s niece inherits €4500,000. Under this table, the first € 20,000 is tax-free; however, the amount after that (€430,000) is taxed at 25 %, as a niece is under Group 2.

If you find yourself in a legal dispute regarding German inheritance tax or the applicable assets to be taxed under German law, our inheritance law team is ready to apply their knowledge and experience to assist you.

Our team also supports heirs with the process of paying inheritance tax. Generally, heirs or executors have one month to file an inheritance tax return. Our lawyers will guide you through that process if an extension is needed. Our team can also inform you of ways to reduce the inheritance tax liability in Germany.

Property Inheritance in Germany

If a property makes up part of the inheritance, the tax situation can become more complicated as estate tax rules may also apply. Properties can be exempt from estate tax if the property was the family residence before the passing of the deceased and if it’s inherited by their spouse and the intention is that it will be used as the family home for the next ten years. The property in question should be within the European Union for this exemption to apply. If the property is to be liable to estate tax, its value will be based on the fair market value at the time of the deceased’s passing.

When inheriting a property in Germany, heirs have six weeks to decide on whether to accept or reject a property. Although inheriting property may sound promising, it can also lead to significant problems. These problems include:

  • does the heir has straightforward access to the property?
  • Can it be used for the purpose in mind?
  • What is the cost of restoring it?
  • Can the property be further developed?

Our inheritance law team is ready to advise you regarding inheriting a property in Germany.

Tax Clearance Certificate (Unbedenklichkeitsbescheinigung) Applications

The tax clearance certificate is required by banks to transfer assets to heirs based abroad. If the bank pays the money without receiving the tax clearance certificate and without the inheritance taxes being paid, the German tax office can make the bank itself liable. The German tax office responsible for inheritance tax provides the tax clearance certificate (Unbedenklichkeitsbescheinigung) once they have examined the documents and determined that there is no inheritance tax due.

Similarly, insurance companies that pay an insurance sum abroad without ensuring that the inheritance tax is paid can be found liable for the tax on the amount paid. Estate administrators, executors, trustees and notaries face similar problems if they intentionally or negligently transfer the assets abroad before payment of the inheritance tax. However, this liability does not arise in cases where the amount paid out does not exceed €600 per § 20 ErbStG.

At Schlun & Elseven Rechtsanwälte, our inheritance law team regularly assists international clients with their inheritance taxes and oversees the process of obtaining the Unbedenklichkeitsbescheinigung. Contact our team directly for further support.

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Practice Group: German Inheritance Law

Practice Group:
German Inheritance Law

Dr. Thomas Bichat

Lawyer | Salary Partner

Contact our German Inheritance lawyers

Please use the contact form provided to outline your legal requirements. Upon receipt of your request, we will provide you with a brief initial assessment based on the facts described and send you a cost offer. You can then decide whether you would like to place to continue working with us.