The allowances of inheritance – what is taxed and what is not?

In order to protect the heirs from a large financial burden, different tax rates and allowances apply depending on the degree of relationship. These allowances include various things that do not have to be taxed, so that the heirs do not have to pay the most as taxes, especially in the case of a large estate. You can now find out what the tax-free amounts are and how high they are for the respective family members.

• Life estate: bequeathing correctly
• Learn more about: Inherit properly

Pension allowances – precisely regulated for children and spouses

Pension allowances are payable if the partner or children were dependent on the financial support of the deceased. For spouses, the pension allowance is €256,000 provided that the surviving spouse does not have a widow’s pension or occupational pension for which no inheritance tax is payable. If such a pension exists, the value of the pension is determined on the basis of the expected duration of the benefits and the pension allowance is reduced by this value.

Children are entitled to pension allowances that are graduated according to the age of the child at the time of death. Infants up to the age of 5 are entitled to a pension allowance of 52,000 euros. Starting from this point, the pension allowance decreases by approximately 10,000 euros every five years. Children aged 20 to 27 can therefore claim a pension allowance of 10,300 euros, but these allowances are only relevant if the children do not have their own pension payments, such as an orphan’s pension.

• Pension allowances apply if the partner or children were dependent on the deceased’s financial support
• Spouses and registered partners receive 256,000 euros
• Children receive 52,000 euros, but the amount is reduced under certain conditions

Inheritance tax: clever use of allowances – tips from a specialist lawyer

Further allowances – different according to degree of relationship

The other allowances, in addition to the pension allowances, are regulated according to the degree of relationship and are independent of existing survivors’ pensions or own assets. Accordingly, spouses and registered partners inherit an allowance of 500,000 euros. Children of the deceased or grandchildren of the deceased, if their parents die before the inheritance, can claim an allowance of 400,000 euros. Grandchildren whose parents are still alive can claim an allowance of 200,000 euros. Great-grandchildren or the deceased’s own parents are entitled to an allowance of 100,000 euros. All other heirs can claim tax allowances of 20,000 euros. To ensure that as little tax as possible has to be paid on inheritance, the testator can make important decisions long before death and specify them in the will.

Only what remains of the estate after deducting the allowances is taxable. Each taxable acquisition is rounded down to a full €100. The individual tax rates of inheritance tax depend on the different tax classes of the heirs and are also progressively graduated.

• There are other allowances that apply to both inheritance and gifting
• The free allowances are based on the degree of relationship

Gifts – allowances and gift tax

Inheritance tax and gift tax are closely linked. Almost the same allowances apply as in the case of inheritance, however, the gift allowances may only be left tax-free once in ten years. Testators who wish to reduce the inheritance tax for their heirs must therefore start gifting their assets ten years before their death. In the case of patchwork families, this rule means that it can make sense to adopt the spouse’s children in order to bring the tax-free amounts into line with those of the biological children. The adoption does not affect the succession to the other biological parent.

A gift thus actually allows for savings opportunities in inheritance tax. The testators must be aware of these possibilities and use them in a targeted manner in order to have to hand over less of an estate in taxes. Non-marital partners must note that even long-term civil partnerships only allow the given tax allowances if they are officially recognised, either through marriage or through registration of the partnership.

• The same allowances apply to gift tax as to inheritance tax.
• The two are closely linked and follow the same premises

Tax-exempt goods – works of art, libraries or household effects

In addition to tax-free allowances, there are also goods that are tax-free. For close relatives in tax class I, movable assets such as household effects or similar objects of daily use are tax-exempt if they do not exceed a value of 42,000 euros. For all other heirs, a value of 12,000 euros applies here. If works of art, archives or libraries are part of the estate, they are generally exempt from tax at a rate of 60 percent. If the estate includes a building in which one of the heirs lives, this can also be exempt from tax.

• Some goods are tax free or tax exempt up to a certain amount
• Archives, works of art and libraries are 60 percent tax-exempt

You can also find out more about the topic: Bequeathing correctly during your lifetime!

The most important questions on the subject of tax allowances and inheritance tax

Since the allowances vary depending on the degree of relationship and also depend on the succession, questions often arise on this topic. So that you know which allowance you are entitled to and how much inheritance tax is due, the experts at Lukinski answer all the important questions on the subject of allowances and inheritance tax.

What is the allowance for inheritance tax?

The tax-free amounts vary depending on the degree of relationship. For spouses and civil partners, an amount of 500,000 euros applies, for children and grandchildren, if their parents are already deceased, an amount of 400,000 euros applies. For grandchildren whose parents are still alive, an amount of 200,000 euros applies and for parents and grandparents an amount of 100,000 euros applies.

What is the allowance for inheritance between siblings?

In the case of inheritance among siblings, an allowance of 20,000 euros applies. The heirs are subject to tax class 2.

How can I avoid the inheritance tax?

The inheritance tax can be reduced by the testator already starting to give away his inheritance during his lifetime. Here, some guidelines must be followed so that no gift tax is incurred. If everything is observed, the inheritance tax can be reduced by the gift and, depending on the case, can even be completely omitted.

When do I pay inheritance tax?

Inheritance tax is paid by every heir. However, tax is only levied on the amount that exceeds the exempt amount. The possible tax-free amount varies depending on the degree of relationship.

Is a gift taxable?

Gift tax is very close to inheritance tax. In general, a gift must be taxed in the same way as an inheritance, but the same allowances apply here. Testators can therefore minimise inheritance tax by making a gift during their lifetime.

Until when is an inheritance tax-free?

This depends on the degree of kinship. Close relatives such as spouses and children have a higher allowance than grandchildren, parents or grandparents of the deceased.

How much is the inheritance tax?

The amount of inheritance tax depends on the degree of relationship, the amount of the estate but also on the respective allowances. How high the inheritance tax is in each individual case must be calculated individually.

A cat as a pet – these breed differences exist

Who would like to have a cat as a pet, which should first be well informed, because not all cats are the same. With the four-legged friends there are many differences both from nature and from the appearance between the different breeds. Which breed suits you best, you will now learn!

Bengal – playful and very affectionate

The Bengal cat, which from the outside very much resembles the leopard, is medium to large for a cat, with a shoulder height of up to 40 cm and a weight between 4 and 8 kg. It is very slender, muscular and athletic, which is also reflected in its nature. A Bengal cat is not suitable for a pure apartment keeping. She needs enough exercise and occupation from her owner in the sense of small games and skill exercises. Besides its active lifestyle, the Bengal cat is very attached to its master and loves long cuddles and lots of body contact. If she is to be left alone for long periods of time, a playmate is a great option. The Bengal is perfect for families with children but also for singles or couples who live in a house with a garden.

Editor’s Rating:

• Family friendly 4.5 / 5.0
• Single and couple friendly 3.0 / 5.0

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Siamese cat – very sensitive and affectionate

The elegant animals belong to the medium-sized cat breeds and weigh on average 3-5 kg. Their appearance gives them a very special charm. The nature of the animals is generally very playful, but they are also very affectionate, sensitive and seek much physical contact. If they do not like something, they make this clear and also assert themselves in their opinion. Because of their close relationship to humans, the Siamese cat can also be used as a therapy animal for handicapped children. Due to their thin fur they are very intolerant to cold and do not like humid weather. The animals must be kept busy both indoors and outdoors and must be kept sufficiently occupied to act out their hunting instinct. Scratching trees, games and climbing possibilities are therefore very important for them. The cats are well suited for family life, as they are very people-oriented, but this breed is also a good option for singles and couples.

Editor’s Rating:

• Family friendly 4.5 / 5.0
• Single and couple friendly 4.5 / 5.0

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Carthusian cat – the perfect family member

The Carthusian cats belong to the medium-sized cats and have an average weight of 4-7 kg. They are known for their calm nature and are therefore a popular family cat. They get along great with children, are very affectionate and cuddly. They also have no problem staying alone for a few hours a day. As kittens they are playful and like for example small balls as occupation. A scratching post should be present in every home of a Carthusian cat, because they love the overview they have from a high sitting position. What should also not be missing are several quiet places where the cat can retreat to. The Carthusian cat can easily be kept in an apartment, but in a house also likes to mark the garden as its territory. The breed is perfect for families with children but also good for singles or couples who would like to have a quieter pet.

Editor’s Rating:

• Family friendly 5.0 / 5.0
• Single and couple friendly 4.5 / 5.0

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Holy Birman cat – very calm and little stubbornness

The sacred Birman cat is a very special breed. They are medium-sized and weigh on average 3-6 kg. Their nature is very different from their peers. Unlike other cats, the Birman cats have little stubbornness and rather want to please their master. They are very trusting and in need of cuddling, but also enjoy playing with moving objects. They are very easy to train and very well behaved. They get along well with children and also with other animals, like dogs they have no problem. The breed is perfect for apartment keeping, however, she does not like to stay alone and is therefore happy to have a conspecific. As an outdoor cat, the Holy Birman is rather not suitable, because her trustfulness towards strangers can become dangerous for her. As a family cat the Holy Birman is perfectly suitable, but also for singles and couples who do not want to have a stubborn cat, this breed is perfect.

Editor’s Rating:

• Family friendly 4.5 / 5.0
• Single and couple friendly 5.0 / 5.0

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Sphynx cat – perfect for allergy sufferers

The Sphynx cat is probably one of the most affectionate cat breeds. They are very affectionate and like to find a person to fixate on. They do not like to be alone, as the cat is very sensitive. Sphynx cats are very intelligent and enjoy challenging toys. Due to the lack of fur, the cats are very sensitive to cold. Also draughts and air-conditioned rooms can quickly become dangerous for them. Design ideas: home design. Cats prefer the sun and warmth, which is why they should always have access to heated rooms. In the winter, a heat lamp helps the breed maintain body temperature. Since they do not have fur, they are perfect for allergy sufferers. As a family cat, the Sphynx is perfect but it is also a great option for singles or couples and especially for those with allergies.

Editor’s Rating:

• Family friendly 4.5 / 5.0
• Single and couple friendly 4.5 / 5.0

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Maine Coon cat – lots of outdoor space and great play opportunities

Maine Coon cats are relatively large, with a length (nose to tail) of about 1m and a weight of up to 9 kg. She is by nature very people-oriented, friendly and sociable. She is good with children and dogs and likes to play with them. In addition, she is a very good hunter and is still called “working cat” in the USA, i.e. mice and rat catcher. The breed is considered very lively and therefore needs a lot of space to live out the hunting instinct. The best place is a garden or a big flat, where there are enough climbing possibilities and diversions. A stable scratching post and a large litter box are absolutely necessary. Due to its semi-long coat it needs some help and more care, especially when changing its coat. She is well suited for families in a large house with a garden, as she is very playful but also trusting towards children.

Editor’s Rating:

• Family friendly 4.5 / 5.0
• Single and couple friendly 2.5 / 5.0

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Siberian cat – she loves the water

The Siberian cat is a very social animal and is always happy to have company. The attitude with another cat is therefore highly recommended. Also with other animals, the cat gets along very well. To humans it is very friendly and playful, but also cuddling may not be missing in any case. If it is kept as a house cat, it needs mandatory climbing and playing opportunities, such as a scratching post. The special thing about these cats is that they love water and like to play in a still wet shower, at a dripping tap or even with the water bowl. The Siberian cat is perfect for families as well as for singles or couples as an indoor or outdoor cat.

Editor’s Rating:

• Family friendly 4.5 / 5.0
• Single and couple friendly 4.5 / 5.0

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Savannah cat – more wild animal than domestic cat

The Savannah cat is larger than an ordinary domestic cat and reaches a shoulder height of up to 45 cm. This is derived from the relatively fresh breeding of this breed. The breeders aim at a small version of the serval, a predatory cat, whereby the proportion of wild blood in the breedings is still very high. Because of this new breeding the temperament is very different, depending on the generation. Some already show strong domestic cat behaviour, are cuddly and affectionate while others are more like wild animals. This manifests itself especially in shy behavior, occasional aggressiveness and constant stress. Keeping these cats is only an option for experienced owners. The cats also need a certain standard for their home, such as plenty of free-range space and little confined space of a house or apartment. Those who do not meet these requirements should refrain from keeping a Savannah cat. For families and beginners in keeping this breed is not a good option. The cats are still too unpredictable and wild to be kept as a normal house cat.

Editor’s Rating:

• Family friendly 0.5 / 5.0
• Single and couple friendly 1.0 / 5.0

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