Inheritance tax allowance unlawful in case of residence abroad

The European Court of Justice has once again ruled that the low allowance for foreign cases in inheritance tax violates EU law.

If both the heir and the testator are not resident in Germany, the inheritance tax allowance for assets inherited in Germany is only EUR 2,000. The European Court of Justice has now once again ruled that this allowance is contrary to European law because it violates the free movement of capital. Unlike the previous ruling, the new ruling is not based on a specific case, but on a complaint by the European Commission. Germany will therefore have no choice but to amend the law again, as the last amendment in 2011 was not sufficient.