Does the Finanzamt give credit for UK Inheritance Tax (IHT) paid?

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Inheritance tax in the UK is a tax on the estate. In Germany IHT/gift tax is on the beneficiary. My UK mother is leaving everything to me and my UK sister. I live permanently in Germany. The amount involved exceeds the German “parent to child” allowance. Will the Finanzamt give me a credit for the IHT paid in the UK when calculating the German tax due? My Steuerberater is not prepared to commit himself!

 

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4 hours ago, Cris321 said:

Inheritance tax in the UK is a tax on the estate. In Germany IHT/gift tax is on the beneficiary. My UK mother is leaving everything to me and my UK sister. I live permanently in Germany. The amount involved exceeds the German “parent to child” allowance. Will the Finanzamt give me a credit for the IHT paid in the UK when calculating the German tax due? My Steuerberater is not prepared to commit himself!

 

 

 

 

They did exactly this for me a few years back.  My Steuerberater would not/could promise that the FA would do this, but they did.

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If the family home is involved and if your mother was married/in a civil partnership then the IHT threshold can be up to almost £1m as there an additional residence nil rate band (https://www.gov.uk/guidance/check-if-you-can-get-an-additional-inheritance-tax-threshold) and any unused nil rate bands of the previously deceased spouse/partner can (on a claim on forms IHT402 for nil rate band and IHT436 for residence nil rate band) be transferred to the later deceased person.  

 

Depending on the size of the estate this may render this a non-question but I leave you to ponder and take advice, rather than sharing such intimate details onlineB)

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7 hours ago, Cris321 said:

Inheritance tax in the UK is a tax on the estate. In Germany IHT/gift tax is on the beneficiary. My UK mother is leaving everything to me and my UK sister. I live permanently in Germany. The amount involved exceeds the German “parent to child” allowance. Will the Finanzamt give me a credit for the IHT paid in the UK when calculating the German tax due? My Steuerberater is not prepared to commit himself!

 

Yes, don't worry.

Please tell your Steuerberater to read §21 ErbStG: https://www.gesetze-im-internet.de/erbstg_1974/__21.html

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Thank you so much for your replies, I have been having sleepless nights about this!

 

@Snowingagain it is reassuring to hear that you had the same experience with your SB, but it worked out alright in the end.

 

@PandaMunich thank you for the reference, I will give it to him. I suspect his concern was the FA could argue that the tax being paid by the estate is not being paid by the recipient (directly), so no credit is due. Obviously this would be unbelievably unfair, especially at England's very high rate of IHT!

Do the FA accept the Inland Revenue printout of tax due or does one get the estate solicitors in England to write letters in German explaining the whole English tax situation?

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6 minutes ago, Cris321 said:

 

 

6 minutes ago, Cris321 said:

 

Do the FA accept the Inland Revenue printout of tax due or does one get the estate solicitors in England to write letters in German explaining the whole English tax situation?

 

 

For me I just used the solicitor estate stuff.  It was accepted without question. The FA here seemed pretty clued up about the tax situation in the UK.  Well, of course, they are German!

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