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Inheritance Tax Calculator (Germany)

Calculate German inheritance tax (Erbschaftsteuer). Including tax-free allowances, tax classes, and gift tax optimization tips.

€

Tax amount

€11,000.00

Tax-free allowance

€400,000.00

Tax rate

11%

Net amount

€489,000.00

Inheritance amount
€500,000.00
Tax-free allowance
-€400,000.00
Taxable amount
€100,000.00
Tax class
1
Tax rate
11%
Tax amount
-€11,000.00
Net amount
€489,000.00
Through staggered gifting, you could save up to €11,000.00 in taxes.

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What is German inheritance tax?

Inheritance tax (Erbschaftsteuer) is a tax on the acquisition of assets through inheritance or bequest. In Germany, it is governed by the Inheritance and Gift Tax Act (ErbStG). The amount of tax depends on the value of the inherited assets, the relationship to the deceased, and the resulting tax class. There are three tax classes with different tax rates ranging from 7 percent to as high as 50 percent.

Tax-free allowances

Every heir has a personal tax-free allowance that depends on their relationship to the deceased. Spouses and registered partners can inherit up to 500,000 EUR tax-free, children up to 400,000 EUR, and grandchildren up to 200,000 EUR. Parents receive an allowance of 100,000 EUR in the case of inheritance. For all other persons, including siblings, nephews, nieces, and unrelated persons, the allowance is only 20,000 EUR. Only the amount exceeding the tax-free allowance is subject to taxation.

Gifting as an alternative

A commonly used strategy to reduce inheritance tax is gifting during the donor's lifetime. The key advantage is that personal tax-free allowances renew every 10 years. This allows parents to transfer significant wealth to their children tax-free over their lifetime. For example, if a parent uses the full 400,000 EUR allowance for their child every 10 years, up to 1.2 million EUR can be transferred tax-free over 30 years. It is important to observe the 10-year period precisely and to properly report all gifts to the tax office.

Tax classes and tax rates

German inheritance tax has three tax classes. Tax class I includes close relatives such as spouses, children, and grandchildren and features the lowest tax rates from 7 to 30 percent. Tax class II applies to siblings, nephews, and nieces with rates from 15 to 43 percent. Tax class III covers all other persons with tax rates from 30 to 50 percent. Within each class, the tax rate increases progressively with the taxable amount. The effective tax rate can therefore vary significantly depending on the inheritance amount and the relationship to the deceased.

Frequently Asked Questions

Tax-free allowances depend on the relationship to the deceased. Spouses and registered partners have an allowance of 500,000 EUR, children 400,000 EUR, grandchildren 200,000 EUR, and parents (in case of inheritance) 100,000 EUR. Siblings, nephews, nieces, and unrelated persons each have a 20,000 EUR allowance.
There are three tax classes. Tax class I includes spouses, children, grandchildren, and parents (inheritance). Tax class II applies to siblings, nephews, nieces, and in-laws. Tax class III covers all other persons. Tax rates increase significantly with higher tax classes.
Inheritance tax is levied upon the death of the decedent, while gift tax applies to transfers during the donor's lifetime. Both use the same allowances and tax rates. The key advantage of gifting is that allowances renew every 10 years, allowing more wealth to be transferred tax-free through staggered gifts.
Yes, through timely gifts during your lifetime, you can use the tax-free allowances every 10 years. For example, if a parent gifts their child 400,000 EUR every 10 years, up to 1.2 million EUR can be transferred tax-free over 30 years.
Inheritance tax becomes due when the value of the inheritance exceeds the personal tax-free allowance. The tax must be reported to the competent tax office. Typically, the tax office issues an assessment after the inheritance tax return is filed. Payment is due within one month of receiving the tax assessment notice.

All calculations are for general informational purposes only. Not financial, tax, or legal advice. No guarantee of accuracy. Use at your own risk. Full disclaimer