German Law/Inheritance tax
Dear Herr Haarhaus,
I would like to know whether a British ex-patriate living and resident for tax purposes in Germany who inherited money and property from his deceased father in England would be liable to pay any inheritance or other tax in Germany. Inheritance tax would be paid on the father's estate in England at 40 % (above a tax-free amount of 325,000, I think) and then the beneficiaries would receive their shares. As a beneficiary, would a British ex-patriate resident in Germany be subject to any tax in Germany on his share of money and property? If he were, I assume it would be an inheritance tax and then, according to German inheritance law, he would have a tax exemption of 400,000 euros as one of the children of the father. And if the share were below this amount then he would have nothing to pay in any case. Is that correct? And does he have to declare to the German authorities that he has inherited money in the UK?
Thank you in advance for your help and advice
As you maintained your residence in Germany at the time your father died you would be subject to unlimited inheritance taxation in Germany including all world-widely located assets. German tax exemptions such as the mentioned the personal tax exemption of 400.000 € for offspring would also apply. Furthermore, any English tax burden could be deducted from the German tax. Even if no tax became due under these circumstances you would have to file a tax return to the German authorities.