Think earlier about later: active succession: what to look for when inheriting a portfolio | news

by Stefan Rullkötter, Euro on Sunday

Dthe generational heirs are in a party mood. Last year, the German tax authorities valued inheritances and gifts worth a total of 84.4 billion euros. Taxable wealth increased by 5.9 percent compared to 2019, the fixed inheritance and gift tax even increased by 19.4 percent to a total of 8.5 billion euros. But much more was inherited and given away. The Federal Statistical Office does not take into account most inheritances and gifts because they are under the high supplements.

As 13 million investors in Germany now own stocks, mutual funds and ETFs, tax revenues are likely to continue to rise as the stock market continues to boom. The issuer and the recipient should therefore know the legal and tax details of transferring securities accounts:

Error reporting requirements

¦ Inherited deposits can not be kept secret from the tax authorities. Banks, construction companies, investment companies and insurance companies are subject to their own notification requirements for inherited investor assets of EUR 5,000 or more. They must, as a rule, report all account balances, deposits, securities and claims from the deceased as well as other assets that they hold for the deceased to the responsible tax office no later than one month after they become aware of a customer’s death. As a rule, heirs are not informed about the transfer of data. The financial institutions are also not legally obliged to send them a copy of the report.

¦ The reporting obligation for financial service providers also includes their branches abroad. For example, the tax authorities automatically receive information about the deceased’s deposits and accounts in Luxembourg. Anyone who inherits assets abroad or receives them as a gift must always inform the tax office.

¦ If the deceased had a safe in a bank or savings bank, banks only report to the tax office that there was one – they usually know nothing about the contents. However, heirs are required to indicate the valuables stored there, such as gold coins, cash, so-called physical securities (papers in paper form) and jewelery in the tax return.

¦ Banks report the assets of the investments on the day of a customer’s death. The market value of the securities on the day of the testator’s death is decisive for the calculation of the inheritance tax that may fall due. Heirs can refer to the lowest daily price listed on a German stock exchange. You can also use the price range between the purchase and offer price in your tax return – and use the cheaper purchase price.

¦ If banks can not find a new owner for accounts and deposits after the inheritance, the assets do not expire. Even years after the last account movement, the heirs are entitled to payment. After 30 years, banks have to write off credit balances and tax the capital gains accumulated during this time. If heirs only register after this long period has expired, they still have access to the financial assets.

Beware of account approvals

¦ Heirs must identify themselves to banks if they want to divest assets as legal successors. If accounts and custodians of the deceased are to be closed, banks require the regular presentation of an inheritance certificate. This enables recipients to prove in business transactions with financial institutions and cadastral registers that they are the legal heirs. Inheritance certificates must be sought from the competent probate court by submitting evidence, such as a will or an inheritance contract. This is located by the district court in whose district the testator had his last residence.

The fees for an inheritance certificate depend on the market value of the estate: at 250,000 euros, the heirs must expect costs of around 1,000 euros. In the general terms and conditions for heirs, banks must not compulsorily require heirs to present them, but must also accept a notarial will as proof of inheritance. In addition, in “clear cases of inheritance”, banks are required to recognize a private will as evidence, the Federal Court of Justice ruled (Az. XI ZR 440/15).

¦ If deceased securities account holders have given their heirs power of attorney for accounts and securities accounts during their lifetime, an inheritance certificate is also unnecessary. An account power of attorney that an heir can use against the bank after the heir’s death can be given informally. Banks have the appropriate forms ready for this.

¦ If a child takes care of his parents’ banking affairs, he is not always obliged to account for the transactions made to the siblings who inherit it after their death, the Braunschweig Higher Regional Court ruled (Az. 9 U 24/20 ). An heir had given her son not only a bank power of attorney but also a power of attorney in case she needed care and attention. The judges found that the precondition for a bookkeeping requirement was that the mother had lawfully ordered him to carry out the banking business.

The pitfalls of inheritance tax

¦ As the legal successors of the deceased securities account holder, the heirs also take over their original acquisition prices. Example: Heir bought share A in March 2017 for 100 euros, the heir sells it in March 2021 for 150 euros. The custodian bank must then pay withholding tax plus solidarity supplement and any church tax (total maximum 27.99 percent) of the gain of EUR 50. If deposits are dissolved within five years after the inheritance, section 35b of the Income Tax Act can generally prevent double taxation of income and inheritance taxes. However, this provision does not apply to the final withholding tax on capital gains, according to the Finance Court in Münster (Case No. 7 K 3409/20 AO). The tax reduction is therefore only possible if the personal tax rate is used for the tax assessment (Appendix KAP, line 4).

¦ If the inherited shareholding still contains shares purchased before the introduction of withholding tax in 2009 and has been held continuously since then, heirs can realize capital gains tax-free. Conversely, they can not claim losses slightly with inherited shares purchased before 2009 – the one-year speculation period that was relevant for this expired no later than the end of 2009. This is calculated from the date of acquisition of the previous owner of the shares.

¦ A special feature applies to open loss carryforwards from share transactions (“loss compensation pot I”), which the testator was no longer able to set off against in his lifetime. Six years ago, the Federal Fiscal Court overturned its 1970 case law and ruled that heirs must no longer offset these lousy people from 2015 in order to reduce taxes (Az. GrS 2/04).

Electives on inheritance & wealth

CDU / CSU: The Union rules out an increase in inheritance tax. The high tax deductions for spouses (500,000 euros) and children (400,000 euros) for inheritances and gifts must remain, and tax privileges on business transfers must be reconsidered if necessary. There should be no wealth tax.

SPD: Company heirs and family funds should pay a “minimum tax” for large business assets. There must be a wealth tax of one percent per year. With high personal tax deductions, the SPD wants to concentrate this tax “on the particularly affluent sections of the population”.

Alliance 90 / The Greens: With the inheritance tax, “the design possibilities must be reduced and large fortunes again taxed harder”. There should be a wealth tax of one percent per year from two million euros. In this context, preferential treatment is only intended for medium-sized and family businesses.

Free Democrats: A tightening of the inheritance tax and the reintroduction of a wealth tax is categorically rejected. The inheritance tax accruing to the Länder must be checked “for its manageability and the cost-benefit ratio”.

Left: Inheritance tax must be increased and privileges for business assets must be abolished. “Normal” owner-occupied housing must remain tax-free and hereditary. In addition, there should be a “wealth tax with a progressive tariff”: the initial tax rate should be one percent from one million euros of private assets (excluding debt), the maximum tax rate should be five percent from 50 million euros. Old-age support should continue to be an exception. There is a five million euro tax deduction for business assets.

AfD: The inheritance and gift taxes currently collected must be abolished as so-called substance taxes. A wealth tax should not be introduced for the same reason.


Image sources: MakroBetz /, Lisa S. /

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