Estate subject to tax liabilities – Avoiding criminal tax proceedings
Have they been, or taxes are evaded, this may not only apply to the person committing the tax evasion, criminal consequences have, but nevertheless, for the heir or heirs in the event of the testator’s death.
Estate subject to tax liabilities – Avoiding criminal tax proceedings: In principle, heirs are not liable, either personally or financially, for the deceased’s (tax) offences. However, they are obliged to rectify incorrect or incomplete tax returns. This is subject to the condition that the heir or heirs are aware of any tax returns by the deceased that have not been filed, or that are incorrect or incomplete. Particularly where the estate includes foreign bank accounts, securities accounts or property assets, a thorough check should be carried out to establish the origin of the assets and whether the income from them has been fully declared to the tax authorities.
If it transpires that the deceased concealed income, action should be taken immediately, but also with due care. At this point at the latest, expert legal advice should be sought. If this income is not declared by the deceased despite their knowledge of it, the tax evasion will be continued by the heirs. This may also be realised on the basis of the income attributable to the heirs following the death.
The sooner action is taken, the better.
If action is taken in good time, criminal tax proceedings can usually be avoided. Those affected should under no circumstances attempt to „play for time“, as the risk of detection has risen significantly, particularly in the case of foreign accounts and custody accounts and in view of the forthcoming comprehensive international exchange of data from 2017 onwards. Precisely because of the criminal law implications, affected heirs should not hesitate to address such matters with the assistance of legal expertise and, following a legal assessment, take any necessary further steps.
For this, you have Matthias E. Grimme, solicitor, specialist in tax law and tax adviser is available. Thanks to his wide-ranging qualifications, his specialisation in criminal tax law and his many years’ experience in this field, you can rely on him to provide comprehensive advice and representation in all areas of criminal tax law.