Forensic Accountant for Business Litigation in Germany

You need to understand German company accounts?

In order to win a business or corporate law suit, understanding the numbers is often equally important as knowing the legal aspects of the case. The same is true if you plan to acquire a German business. Thus, the German-British litigation lawyers as well as the M&A experts at Graf & Partners (www.grafegal.com) regularly team up with German forensic accountant Hermann Werle.

Hermann obtained his degree in business administration from Regensburg UAS in 1982. Throughout his 25 year career he then worked as inhouse accountant, head of controlling, CFO and company director / CEO for renowned German and international companies and was involved in a number of mergers including Mallinckrodt, Sherwood Davis & Geck and U.S.-Surgical. Thus, Hermann gained a wealth of professional experience in various industrial sectors. While his core competence is finance, he also has practical experience in HR, IT, purchasing, warehousing and distribution.

In 2014, Hermann set up his own financial consultancy firm and provides professional advice to German and international firms, often in collaboration with the German and British litigation lawyers of Graf & Partners. His main focus is on the areas:

  • forensic accounting in cross-border litigation cases and
  • German-British and German-American merger & acquisition deals (financial due diligence)

We have worked with Hermann Werle on dozens of business litigation cases as well as international mergers. Our German as well as our international clients have always been extremely impressed by his skills, in particular his ability to break down and explain the most complex situations to non-accountants, i.e. to litigation lawyers and judges.

More information on litigation and legal fees in Germany is available in these posts:

For more on German business and corporate law see these posts:

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Experts on German-British and German-American Legal Matters

Since 2003, the German business and corporate law firm Graf Partners LLP specialises in British-German and US-German legal cases. Our German business and corporate lawyers are native speaker level fluent in English, have many years of practical experience with clients from Britiain and the USA and are part of a well established network of law, tax and accounting firms.

Managing partner Bernhard Schmeilzl was admitted as German Rechtsanwalt (attorney at law) to the Munich Bar in 2001 and specialises in international cases ever since, with a focus on German-American and German-English commercial, corporate and also probate cases. In addition to obtaining his German legal exams with distinction, he also graduated from the English University of Leicester where he obtained his Master of Laws degree in EU Commercial Law in 2003.

In 2014, Graf Partners LLP has set up the international litigation department GP Chambers which focuses on providing professional litigation services to British and US-American clients, both on a commercial and a private client level. The Graf Partners litigation lawyers regularly appear before German law Courts throughout the country and provide specialist legal advice, support and advocacy services in all commercial and civil law matters, ranging from contract disputes, corporate litigation and employment, to damage claims, divorces and contentious probate. If you wish us to advise or represent you in a German or cross border case, or if you need an expert report on German law, please call +49 941 463 7070.

British Expats Beware of Foreign Succession Laws and Foreign IHT

Children of British Expats in Europe often are entitled to the Estate without even knowing it. EU Succession Laws are full of surprises.

British expats who are resident in Europe, let’s say in Germany, Austria, France or Spain, rarely are aware that ever since the introduction of the EU Succession Regulation (August 2015), if they pass away while being resident in that country, the Inheritance and Succession Laws of that country of residence will most likely apply to their estate. This is due to the fact that the entire European Union (except for the UK, Denmark and the Republic of Ireland) have adopted the EU Succession Regulation which states that the laws of the country in which the deceased had his or her last habitual residence must apply. Habitual residence is easier to achieve than domicile.

Thus, a British national who may consider him- or herself to be domiciled in England, can easily be considered by the German, Austrian, French or Spanish probate court to have established habitual residence outside the UK. Then, from a EU law perspective, these national succession rules (i.e. German, Austrian, French inheritance laws etc.) do apply to the entire estate, including the assets situate within the UK. English law takes a different view on this issue which may lead to horrendous legal disputes and contentious international probate cases which drag on for years and block the administration of the estate both in the UK and in Europe.

Who inherits if a British expat dies abroad?

German Intestacy Rules Overview Chart

The application of foreign succession laws can lead to surprising results. Pleasant or unpleasant, depending on the degree of kinship with the deceased. Under German succession laws, for example, the surviving spouse has a much weaker position compared to the intestacy rules in England and Wales as well as Scotland. Details are explained here and here.

The stunning results are not only caused by different national rules of intestacy. These could easily be avoided by simply creating a will. But even if the British expat has set up a valid will, the inheritance and succession laws of continental EU countries (including Germany, Austria and France) often apply statutory elective share rules, also known as forced heirship or compulsory inheritance share rules. For practical implications of such forced heirship rules see here and here.

By the way: National inheritance tax laws of the respective country of residence do also apply. This cas always been the case and has nothing to do with the EU Succession Regulation and will also not be affected by Brexit. National tax laws are what they are. Still, British expats should inform themselves about the respective IHT laws of their country of residence. Unless they live in Austria because Austria does not levy any inheritance tax (as of now).

In order to avoid unpleasant surprises or probate problems, expats should definitely have their last will checked by an international succession law expert within the country of residence. English solicitors are rarely capable or even willing to consider foreign law implications (for some examples how English wills can lead to catastrophic results outside the UK see here).

If you wish to instruct Graf & Partners LLP to draft a Will or to team up with a foreign lawyer to advise in specific areas of German or Austrian law, please feel free to complete the questionnaire and contact our German succession and probate law experts. Lawyers can create a tailor-made Last Will only if they are fully informed about the testator’s personal situation and his/her objectives. In order to draw up a Last Will that fully meets the clients individual requirements, Graf Partner LLP uses a comprehensive questionnaire and Will preparation checklist (available for download here).  This checklist also helps to facilitate an effective and individual preparation for the personal meeting at the firm.

German solicitor Bernhard Schmeilzl also conducts inhouse seminars for British and American lawyers and accountants who advise clients with foreign assets or who have family abroad. More on these seminars here: Advising Clients with Assets Abroad

For more information on German-British probate matters and international will preparation see the below posts by the international succession law experts of Graf & Partners LLP:

Or simply click on the “German Probate” section in the right column of this blog.

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The law firm Graf & Partners and its German-English litigation department GP Chambers was established in 2003 and has many years of experience with British-German and US-German probate matters, including the representation of clients in contentious probate matters. If you wish us to advise or represent you in a German or cross border inheritance case please contact German solicitor Bernhard Schmeilzl, LL.M. (Leicester) at +49 941 463 7070.

The Perils of the “Free of Tax” Clause in English Wills

English lawyers and tax consultant: beware of personal liability when designing Wills for families who either may own assets abroad or who wish to make gifts to beneficiaries living outside the UK.

The harmless seeming “free of tax” wording as is commonly used by English solicitors when drafting wills for English clients can lead to unexpected quarrels between executors and beneficiaries. Why?

If a UK estate exceeds the UK IHT nil-rate band of currently £325k, HMRC levies 40% inheritance tax. From the perspective of most European countries, this is a staggeringly high tax rate. Austria, for example, knows no IHT at all. In Germany, the inheritance tax rate between close relatives starts at 7%.

Another major difference between the IHT systems of the UK and most continental EU countries is that outside the UK not the estate as such is being taxed but instead each individual beneficiary, sometimes at very different tax rates which depend on the relation to the deceased. Thus, if a beneficiary who receives a gift under an English will lives in such a country (e.g. Germany, France or Spain), that beneficiary will be subject to (additional) inheritance taxation within the country of his / her residence.

And here is where it is getting risky for English solicitors

When drafting an English will, most British solicitors will usually write:

“XY shall receive free of charge the following assets…”

From a British point of view, this means that the gift is not to be reduced by IHT. Instead, from a strictly financial perspective, the portion of UK IHT attributable to that gift shall be borne by the estate, i.e. by those beneficiaries who shall receive the residuary estate. HMRC is not concerned with who shall effectively bear the burden of IHT. From a UK perspective: So far, so good.

However, as we have seen above, if the beneficiary of a specific gift resides and lives in, for instance, Germany (and is therefore deemed to be a tax resident in Germany within the meaning of § 2 ErbStG), then that beneficiary must also pay the German IHT on the value of the gift. This is regardless of any sort of British inheritance taxes, since there is no double taxation agreement between the UK and Germany in the field if inheritance tax.

To illustrate, here is a simple case study in a British-German setting (but the problem also arises in British-French, British-Spanish etc inheritance cases):

An uncle, who is English and lives in London, in his last will gives a gift of €100,000 to his nephew who – at the date of the uncles’s death – is resident in Germany. The solicitor drafting the will includes the wording “free of any tax”. This scenario creates two legal problems:

Problem 1: The nephew (or his German lawyer) will argue that the wording “free of any tax” also applies to German inheritance tax. Under German law, the nephew only has a personal IHT allowance of €20,000, which means that the remaining amount (€80,000) is subject to German IHT. In this case (a nephew receiving €100,000), the tax rate is 20%. If the amount or the relation is different, there can be very different tax rate (detaiils of German IHT rates are explained here).

The nephew will write to the executor and request that he pay the German inheritance tax bill of €16,000. The Executor will swiftly inform the nephew that neither the deceased nor the solicitor who set up the will did have German inheritance tax in mind when drafting the will. One can already see the wonderful dispute arising because of the term “free of any tax”. If the deceased was someone who was fully aware of the fact that one has to pay personal inheritance tax in Germany as recipient of a gift, then the nephew can reasonably argue that his uncle had indeed meant “free of inheritance tax” under both regimes. If the deceased hat, on the other hand, never lived in Germany and had never heard of that German tax concept, then it is the more convincing interpretation of the will that the words “free of tax” really only mean “free of UK IHT”.

Problem 2: Although there is no double taxation agreement between the UK and Germany with regard to inheritance tax, German tax law still offers unilateral relief in certain circumstances. In our example case study, the nephew would be able to set off the respective UK IHT against his tax debt, if his gift would have been reduced by UK IHT. However, if the “free of any tax” clause is interpreted as meaning that the estate has to pay also the German IHT, then the nephew personally bears no UK IHT burden. Within the logic of German IHT, the German beneficiary can thus also NOT claim unilateral relief, i.e. he cannot be given any tax credit in Germany!

The result being that the executor has to pay both UK IHT and foreign IHT on the same gift without being able to claim any foreign tax relief. A very unsatisfactory outcome, especially for the beneficiaries receiving the residuary estate.

This simple case study shows that an English solicitor, by designing a will without the adequate knowledge of the German (French, Spanish etc) tax system can cause considerable tax harm and create great legal quarrels between the various beneficiaries.

Lawyers in different countries must therefore work together in assessing the potential tax consequences in each individual country in order to avoid any pitfalls and nasty surprises.

A possible solution with regard to Germany might be the following wording:

My nephew shall receive a gift of …. With regard to any inheritance tax that may arise in the UK, my nephew shall receive this “free of tax” i.e. the inheritance tax incurred in the UK is not to be paid out of the value of the share deposit, but from other assets. In addition, my nephew shall also receive, as further gift, a sum of money equivalent to that required for any settlement of the IHT in the UK. With regard to taxation, my nephew shall therefore bear the IHT which is attributable to the gift and shall therefore be entitled to deduct the UK IHT by way of deduction from German inheritance tax (§ 21 ErbStG).

Lawyers can create a tailor-made Last Will only if they are fully informed about the testator’s personal situation and his/her objectives. In order to draw up a Last Will that fully meets the clients individual requirements, Graf Partner LLP uses a comprehensive questionnaire and Will preparation checklist (available for download here).  This checklist also helps to facilitate an effective and individual preparation for the personal meeting at the firm.

If you wish to instruct Graf & Partners LLP to draft a Will or to team up with a foreign lawyer to advise in specific areas of German or Austrian law, please feel free to complete the questionnaire and contact our German succession and probate law experts.

German solicitor Bernhard Schmeilzl also conducts inhouse seminars for British and American lawyers and accountants who advise clients with foreign assets or who have family abroad. More on these seminars here: Advising Clients with Assets Abroad

For more information on German-British probate matters and international will preparation see the below posts by the international succession law experts of Graf & Partners LLP:

Or simply click on the “German Probate” section in the right column of this blog.

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The law firm Graf & Partners and its German-English litigation department GP Chambers was established in 2003 and has many years of experience with British-German and US-German probate matters, including the representation of clients in contentious probate matters. If you wish us to advise or represent you in a German or cross border inheritance case please contact German solicitor Bernhard Schmeilzl, LL.M. (Leicester) at +49 941 463 7070.

Is there German Capital Gains Tax when you sell a German Property?

If you buy or inherit German property (whether it is a house, a flat or just a plot of land) and this property is then sold (by you or your heirs) before a period of ten full years has expired, the resulting profit (sale price minus purchase price minus certain related costs like notary fees) is subject to German tax, even if you are not a German tax resident. There are certain exceptions to this rule, e.g. if you have used the German property exclusively as your private residence. If you have inherited the German property, the years during which the legator had already owned the property does count in your favour.

The relevant statute for this capital gains taxation is section 23 German Income Tax Act (Einkommensteuergesetz). The wording of the tax statute is hard to digest even for a German, but in case you wish to try, here you go:

Einkommensteuergesetz (EStG) § 23 Private Veräußerungsgeschäfte

(1) 1Private Veräußerungsgeschäfte (§ 22 Nummer 2) sind: 1. Veräußerungsgeschäfte bei Grundstücken und Rechten, die den Vorschriften des bürgerlichen Rechts über Grundstücke unterliegen (z. B. Erbbaurecht, Mineralgewinnungsrecht), bei denen der Zeitraum zwischen Anschaffung und Veräußerung nicht mehr als zehn Jahre beträgt. 2Gebäude und Außenanlagen sind einzubeziehen, soweit sie innerhalb dieses Zeitraums errichtet, ausgebaut oder erweitert werden; dies gilt entsprechend für Gebäudeteile, die selbständige unbewegliche Wirtschaftsgüter sind, sowie für Eigentumswohnungen und im Teileigentum stehende Räume. 3Ausgenommen sind Wirtschaftsgüter, die im Zeitraum zwischen Anschaffung oder Fertigstellung und Veräußerung ausschließlich zu eigenen Wohnzwecken oder im Jahr der Veräußerung und in den beiden vorangegangenen Jahren zu eigenen Wohnzwecken genutzt wurden; 2. (… not relevant here); 3. (… not relevant here)
(2) Einkünfte aus privaten Veräußerungsgeschäften der in Absatz 1 bezeichneten Art sind den Einkünften aus anderen Einkunftsarten zuzurechnen, soweit sie zu diesen gehören.
(3) 1Gewinn oder Verlust aus Veräußerungsgeschäften nach Absatz 1 ist der Unterschied zwischen Veräußerungspreis einerseits und den Anschaffungs- oder Herstellungskosten und den Werbungskosten andererseits. 2(.. not relevant here) 4Die Anschaffungs- oder Herstellungskosten mindern sich um Absetzungen für Abnutzung, erhöhte Absetzungen und Sonderabschreibungen, soweit sie bei der Ermittlung der Einkünfte im Sinne des § 2 Absatz 1 Satz 1 Nummer 4 bis 7 abgezogen worden sind. 5Gewinne bleiben steuerfrei, wenn der aus den privaten Veräußerungsgeschäften erzielte Gesamtgewinn im Kalenderjahr weniger als 600 Euro betragen hat. 6 (… not relevant here).
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The profit is then considered to be part of your income in the fiscal year in which the German property is sold, more precisely in which the buyer pays the purchase price. As mentioned above, German income tax is levied on this profit even if otherwise you are not a German tax resident. Whether this profit is also considered to be taxable income in your home country (UK self assessment, US income tax or other) and whether there are double taxation treaties in place for such constellations must be assessed in each individual case.
The above does only apply for private property sales (private Veräußerungsgeschäfte). If the buyer is a business or if a private person buys and sells more than three properties in Germany within a period of five years, then the 10 year exemption is not applicable. In these cases any profit is from selling German real estate is always subject to German income or corporate tax.

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More information on buying or selling property in Germany, the German Land Registry, the conveyancing process and the rights and duties of tenants and landlords in Germany is available in these posts:

Or simply click on the sections “Property” or “Conveyancing in Germany” in the right column of this blog.

For more information on cross border probate matters and international will preparation see the below posts by the international succession law experts of Graf & Partners LLP:

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Solicitor_SchmeilzlThe law firm Graf & Partners and its German-English litigation department GP Chambers was established in 2003 and has many years of experience with British-German and US-German probate matters, including the representation of clients in contentious probate matters.

We also advise and represent foreign clients who wish to purchase, sell or lease property in Germany. In case you would like to obtain specific advice on a specific case or need assistance in buying, selling or leasing property in Germany, please contact German solicitor Bernhard Schmeilzl, LL.M. (Leicester) at +49 941 463 7070.

Workshop “Clients with Foreign Assets” for British Inheritance & Probate Lawyers

Why would an English or Scottish solicitor even give a toss about German or Spanish inheritance tax laws or about French or Italian forced heirship rules? Well, for starters, in order to avoid the client’s survivors yelling at him/her some years later because they ran into probate or/and foreign tax problems abroad.

Or, and this is of course the far better reason, to really impress your client with advice on international aspects of estate planning the client would otherwise never have thought of. Are you a solicitor or accountant who advises British clients with assets abroad or relatives living outside the UK? Then you might want to check whether you were already aware of some of the tripwires described in this post on international estate planning and will preparation.

Estate Planning for International Families requires seeing the big Picture

A solicitor who knows the basic principles of other jurisdiction’s succession rules and inheritance tax concepts is much more valuable to his client because such a solicitor can avoid structuring English Wills which may have counterproductive consequences in other countries.

The standard advice given by many English solicitors is still: “If you own assets abroad make a separate Will in each of those countries”. Well, this is simply not enough because such wills need to be synchronised both from a practical probate perspective and in regards to the overall inheritance tax consequences. Also, sometimes the better choice is to deal with the foreign assets directly in the English will.

Since 2003, the succession and tax lawyers of Graf & Partner specialise in international estate planning and will preparation with a strong focus on British-German, American-German, British-Austrian and American-Austrian inheritance cases and probate applications. German lawyer Bernhard Schmeilzl regularly gives presentations and conducts inhouse seminars for British and American lawyers and accountants who advise clients who possess foreign assets or who have relatives abroad who shall inherit or receive gifts or legacies. More on these seminars here: Advising Clients with Assets Abroad

The goal of our seminars on international inheritance and tax law is not to make the English solicitor a Jack of all trades or to expose the solicitor to liability risks. Instead, the goal is to give the solicitor a basic idea about where the English estate planning approach might cause problems elsewhere and then team up with the respective experts from those countries to find the best overall solution for the client and his family.

To give you an impression of the case studies we discuss in our workshops here are a few slides taken from our 90 page power point presentation: Presentation Wills and Estate Planning for International Clients

For more information on German-British or Austrian-British probate matters and international will preparation see the below posts by the international succession law experts of Graf & Partners LLP:

Or simply click on the “German Probate” section in the right column of this blog.

German Tax Clearance Certificate (Inheritance Tax)

What is required to get German assets released to British or US-American executors or beneficiaries?

In order to get German assets released, the executors or beneficiaries must be able to provide the German banks or insurers with a German (or European) Grant of Probate – unless the testator has made the will in notarial form or the testator has granted a transmortal power of attorney. For more on how to access German assets without having to go through probate see this post.

What is often forgotten, however, is that in addition to the German grant of probate (Erbschein), the German banks will also ask to see a tax clearance certificate or “certificate of non objection”, in German called “Unbedenklichkeitsbescheinigung”. Without such German tax clearance letter from the German Finanzamt (tax office), the bank is not allowed to release the assets, especially not for a transfer abroad. More on the legal requirements regarding the release of foreign assets to foreign beneficiaries here.

This is what a typical inheritance tax clearance confirmation letter issued by a German tax office (Finanzamt) looks like. Usually, the German tax authorities send the tax clearance certificate directly to the respective bank to inform them about thefact that the monies may now be released to the executor or the beneficiaries.

The clearance certificate is issued by the local German tax office dealing with the inheritance, usually the city where the testator had his or her last Germany residence. To obtain the clearance certificate, the executor or the beneficiaries must submit the German IHT forms and pay any German inheritance tax due.

For more information on cross border probate matters, international will preparation and German inheritance tax matters see the below posts by the international succession law and tax law experts of German law firm Graf & Partners LLP:

Or simply click on the “German Probate” section in the right column of this blog.

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Solicitor_SchmeilzlThe Anglo-German law firm Graf & Partners and its German-English litigation department GP Chambers was established in 2003 and has many years of experience with British-German and US-German probate and tax matters, including the representation of clients in contentious probate matters. We are experts ininternational succession matters, probate and inheritance law. If you wish us to advise or represent you in a German or cross border inheritance case please contact German solicitor Bernhard Schmeilzl, LL.M. (Leicester) at +49 941 463 7070.

 

Deed of Variation and International Succession

Using a Deed of Variation to mitigate UK Inheritance Tax can backfire if there are Foreign assets or Beneficiaries outside the UK

If someone dies intestate and leaves both a surviving spouse and a child (or children), then UK inheritance tax is due if the value of the estate exceeds GBP 900,000. In these cases, it is tempting to make use of a Deed of Variation in order to “shift” all or a significant additional portion of the estate to the surviving spouse who is entitled to an unlimited spouse exemption. In purely British inheritance cases this is fine.

However, if the deceased or any of the beneficiaries is domiciled or habitually resident outside the UK, for example in Germany, the foreign inheritance tax rules must be taken into account, because then a Deed of Variation may trigger foreign IHT (in addition to UK IHT).

In Germany, as in most continental European jurisdictions, the instrument of Deed of Variation, is not accepted. In other words: While such a Deed of Variation is recognised in Germany as a binding agreement between the parties, such a Deed of Variation does not retroactively alter the IHT situation, i.e. German IHT is always being based on the actual circumstances which had existed upon the moment of death.

Therefore, if the clients decide to use such a Deed of Variation to mitigate UK IHT by “shifting” the assets to the surviving spouse, this will be considered by the German tax office as constituting a gift from child to parent, because the child effectively gives away a portion of his/her inheritance which – due to the German principle of immediate and automatic accession – he/she had already received.

Unfortunately, for such a gift from a child to a parent (upstream gift), German IHT law only grants a personal allowance of EUR 20,000 (twenty-thousand) and the exceeding amount is taxed at 15% (or 20% depending on the amount). In the opposite direction (parent to child, i.e. downstream), there is a personal allowance of EUR 400,000. Upstream lifetime gifts are obviously not considered as being worthy of significant tax allowances.

Thus, while a Deed of Variation may reduce the UK IHT, it will at the same time trigger German IHT if the amount transferred is in excess of EUR 20,000. Yet, since UK IHT is 40% and German IHT in this case only 15 or 20%, a Deed of Variation may still make economic sense. Even a “small” Deed of Variation granting the surviving spouse a specific legacy / bequest of EUR 20,000 (in addition to the statutory legacy of GBP 250,000) would reduce UK IHT by EUR 8,000.

However, one must also consider that UK IHT paid on UK assets can be deducted from any potential German IHT by way of unilateral relief, rendering the possible benefit of a deed of variation even less important from an overall tax perspective. The actual effect must therefore be calculated from an overall perspective, taking into account all national inheritance taxes.

Finally, it should be noted that a Deed of Variation transferring assets upstream goes against the general objective of transferring wealth onto the next generation (downstream). In case of a significant gift child to parents, these assets now transferred upstream will then later have to be transferred back from parent to child, which depletes the personal allowance available to the child.

Therefore, in international inheritance cases, a Deed of Variation may cause more trouble than positive effect.

For more information on German-British probate matters and international will preparation see the below posts by the international succession law experts of Graf & Partners LLP:

Or simply click on the “German Probate” section in the right column of this blog.

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Solicitor_SchmeilzlThe law firm Graf & Partners and its German-English litigation department GP Chambers was established in 2003 and has many years of experience with British-German and US-German probate matters, including the representation of clients in contentious probate matters. We are experts ininternational succession matters, probate and inheritance law. If you wish us to advise or represent you in a German or cross border inheritance case please contact German solicitor Bernhard Schmeilzl, LL.M. (Leicester) at +49 941 463 7070.

Everything about German Inheritance & Gift Tax at one Glance

Many of our blogposts deal with German probate and the tax implications of international inheritance cases (see list below). English solicitors and their clients are often stunned by the fact that German assets which are part of an English estate can trigger significant German inheritance and/or gift tax, in addition to UK IHT.

German IHT inheritance tax gift tax chart

German Inheritance & Gift Tax Chart

This schedule shows at one glance the German IHT tax categories (tax classes), the individual tax rates and the various personal allowances and special tax exemptions available for certain assets. As you can see, the German inheritance tax system is much more complicated compared to British IHT. Depending on who the beneficiary is, the tax actually due can be significantly lower or higher than in the UK.

For more information on German-British probate matters and international will preparation see the below posts by the international succession law experts of Graf & Partners LLP:

Or simply click on the “German Probate” section in the right column of this blog.

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Solicitor_SchmeilzlThe law firm Graf & Partners and its German-English litigation department GP Chambers was established in 2003 and has many years of experience with British-German and US-German probate matters, including the representation of clients in contentious probate matters. We are experts ininternational succession matters, probate and inheritance law. If you wish us to advise or represent you in a German or cross border inheritance case please contact German solicitor Bernhard Schmeilzl, LL.M. (Leicester) at +49 941 463 7070.

Efficient Transfer of Foreign Assets

Seminar for British Solicitors and UK Accountants who advise Clients with Assets Abroad. Main focus is on Germany, but speakers will also briefly touch upon Austria and Switzerland.

seminar_lyndalesIf you advise clients who own property or other investments abroad, they are not always aware of the fact that this will trigger foreign inheritance taxes and that the executor(s) or beneficiaries will have to go through local probate procedure, which can takes many months and cost many thousands in legal and court fees. Smart Will preparation and other preparatory measures can mitigate costs and speed up foreign probate tremendously.

English Solicitor Stan Harris, OBE and German lawyer Bernhard Schmeilzl, LLM (Leicester) are experienced experts in international succession law, especially British-German probate matters and cross-border inheritance tax issues. On  Thursday, 3 November 2016, they offer a seminar for British lawyers and accountants who advise clients with German assets, bank accounts, stocks and investments. Real life case studies will illustrate how to tackle efficiently tackle probate matters connected to Germany. The topics include:

  • Understanding German Wills and Intestacy Rules
  • Will Preparation for International Families and Expats
  • Making English Wills work in Germany
  • Access Foreign Assets in Germany: is Probate unavoidable?
  • Speed up Probate Procedure
  • Mitigate Inheritance Tax in both Countries

Some sample slides are available here:

German Intestacy Rules Overview Chart

German IHT inheritance tax gift tax chart

For more information on German-British probate matters and international will preparation see the below posts by the international succession law experts of Graf & Partners LLP:

Or simply click on the “German Probate” section in the right column of this blog.

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The law firm Graf & Partners and its German-English litigation department GP Chambers was established in 2003 and has many years of experience with British-German and US-German probate matters, including the representation of clients in contentious probate matters. If you wish us to advise or represent you in a German or cross border inheritance case please contact German solicitor Bernhard Schmeilzl, LL.M. (Leicester) at +49 941 463 7070.

International Probate: Assets in Germany will be found (and taxed) by German Tax Office

Nowhere to hide from the German Finanzamt

If the deceased held funds or owned property in Germany, the German Tax Office (Finanzamt) will find out about it and will – most likely – levy German inheritance tax, even if the deceased was not a German national and even if the deceased was not resident in Germany. We have explained the workings of the German Inheritance and Gift Tax Code (Erbschafts- und Schenkungssteuergesetz) here.

Executors are under the legal obligation to submit an inheritance tax declaration (Erbschaftssteuererklärung). The German IHT forms are available for download here.

But would the German tax office (Finanzamt) ever find out about the assets of the testator if the executor would – let’s say – forget to submit such a German IHT declaration? Yes, the tax authorities definitely will find out about such assets of the deceased. For numerous reasons: Continue reading