German Inheritance Tax applies when British Legators (and their Lawyers) least expect it
UK and US lawyers are used to an inheritance tax regime where (only) the estate as such is being taxed. In that system, it does not matter too much, who the beneficiary is and where he or she is domiciled.
The German Inheritance Tax concept works entirely differently (basics explained here). Instead, it taxes the individual beneficiary. However, if that beneficiary is domiciled outside Germany, the German IHT code also taxes the estate. In other words, to a British lawyer, German IHT also does apply in surprisingly many circumstances, namely: Continue reading