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Tax Advice

Inheritance tax after the Bundestag elections

During their campaigns, the political parties have indicated the tax changes that they intend to make if they are elected. Their platforms thus naturally also include statements (admittedly rather vague) about the future of inheritance tax. The central question is ultimately whether the current preferential inheritance tax treatment of assets should be restricted, especially in the case of business assets.

The politi­cal par­ties have not exp­li­citly taken sides on whe­ther pub­lic policy con­s­i­de­ra­ti­ons jus­tify the spe­cial exemp­ti­ons gran­ted for busi­ness assets under inhe­ri­tance tax law. They are pro­bably wai­ting for the deci­sion of the Federal Con­sti­tu­tio­nal Court. The ruling par­ties in parti­cu­lar are likely to take the view that the new rules deci­ded on in 2008 took suf­fi­ci­ent acco­unt of the rea­sons for the pre­fe­ren­tial tre­at­ment. They have addres­sed the con­cern that the pre­fe­ren­tial tre­at­ment can be uncon­sti­tu­tio­nally exten­ded to nones­sen­tial busi­ness assets by enac­ting rules aimed at pre­ven­ting Cash GmbH's. Prior to the deci­sion of the Federal Con­sti­tu­tio­nal Court, the CDU/CSU and the FDP see no furt­her need to address inhe­ri­tance tax law, alt­hough they would argue that it ought to be furt­her deve­lo­ped and sim­p­li­fied. They would also like to intro­duce a uni­form tax basis mea­su­red on fair mar­ket values, with mode­rate tax rates and appro­priate deduc­ti­ons.

The SPD, on the other hand, would like to put a stop to all abu­ses of tax struc­tu­ring opti­ons. To that end, they want to repeal the spe­cial tre­at­ment of busi­ness assets that has been in force since 2009. Any pos­si­ble future pre­fe­ren­tial tre­at­ment would need to be more clo­sely connec­ted with the goal of pre­ser­ving sta­bi­lity in the job mar­ket.
If Alli­ance 90/The Green Party were to come into power, they would attempt to dou­ble the inhe­ri­tance income tax. They would repeal the exemp­tion of busi­ness assets from inhe­ri­tance tax while pro­tec­ting com­pa­nies from the resul­ting bur­den by means of appro­priate deduc­ti­ons.

The Left Party intends to sig­ni­fi­cantly inc­rease reve­nue from inhe­ri­tance tax. To accom­p­lish this, they plan to repeal all tax bene­fits for people inhe­ri­ting com­pa­nies that are not necessary for the pro­tec­tion of jobs.

In the final ana­ly­sis, it remains to be seen whe­ther any addi­tio­nal con­c­rete tax bur­dens for com­pa­nies and/or pri­vate indi­vi­duals can be expec­ted to result from the various party plat­forms – they are far too vague. Howe­ver, if the Federal Con­sti­tu­tio­nal Court deci­des that the tax exemp­ti­ons are uncon­sti­tu­tio­nal, the pre­re­qui­si­tes for exemp­tion of busi­ness assets from inhe­ri­tance tax will undoub­tedly be tigh­te­ned sig­ni­fi­cantly.

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