Inheritance tax remission after default on pension payments

In the case of the annual payment of inheritance tax on pensions or other recurring benefits, a waiver of the payments is possible if the person liable for the benefit later becomes insolvent.

For pensions and other recurring benefits that are subject to inheritance tax, annual payment of the tax can be chosen instead of one-off taxation of the capital value. The remaining capital value can be redeemed at any time. However, if the annuity payments are subsequently canceled due to the over-indebtedness and insolvency of the debtor, a waiver of the remaining tax may also be justified. Although it depends on the circumstances of the individual case for the Federal Fiscal Court, at least in the case in dispute, it considered a redemption of EUR 0 to be appropriate because the heiress had only submitted her application five years after the start of the payment default and it was not to be expected that she would receive further pension payments.