GRP Rainer LLP

Inheritance and Gift Tax Act (ErbStG) Possibly Unconstitutional

The new Inheritance and Gift Tax Act that came into force on 1 January 2009 with the reform to inheritance tax is to be re-examined with respect to its constitutionality.


Cologne, Germany -- (SBWIRE) -- 02/22/2013 -- GRP Rainer Lawyers Tax Advisors, Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart, Hanover, Bremen, Nuremberg Essen and London explains: In its ruling of 27 September 2012 (Az. II R 9/11), the Federal Fiscal Court (BFH) again presented the German Federal Constitutional Court (BVerfG) with the question of whether individual provisions of the ErbStG as amended in 2009 are unconstitutional by reason of infringing the general principle of equality. The reason given for the need for greater clarity from the German Federal Constitutional Court is that the tax allowances from the new ErbStG overlap the earlier Act and could even lead to a complete exemption from the tax. These tax allowances with far reaching financial implications would extend beyond what is constitutionally admissible. With the amending law, tax exemption is the rule and actual taxation the exception.

The constitutional infringements complained of are already thought to alone, but also cumulatively, result in an unconstitutional error in taxation concerning the entire Act. The right of taxpayers, who are not able to claim the allowances, to uniform taxation that corresponds to the capacity of the taxpayer is thereby infringed.

Even the ruling of the BFH includes clear references indicating that it considers the new ErbStG to be unconstitutional. Aggrieved parties could hence potentially profit from a positive decision. With respect to this and a final decision, it could be advisable in relevant cases for aggrieved parties to lodge an appeal against a possible inheritance or gift tax assessment and refer to the ongoing proceedings.

Inheritance tax is complex. For this reason, aggrieved parties should seek comprehensive and individual legal advice from a lawyer active in the law of succession. The lawyer can file an appeal against an inheritance or gift tax assessment and in this connection remain open to the ongoing proceedings.

GRP Rainer LLP is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices Cologne, Berlin, Bonn, Dusseldorf, Essen, Frankfurt, Hamburg, Hannover, Munich, Stuttgart, Bremen, Nuremberg and London UK.

Contact Michael Rainer
Lawyer, Managing Partner

GRP Rainer LLP
Hohenzollernring 21-23
50672 Cologne

Phone: +49 221-27 22 75-0 click my link