Another A company may be an heir be used. A limited liability company (GmbH) that ran a care home was fortunate enough to benefit from this.
She was named sole heir by a resident and, following his death, inherited approximately EUR 1,000,000. However, her joy at the inheritance was short-lived, as the tax office soon got involved. In addition to inheritance tax – which, at a tax rate of 30%, amounted to approximately EUR 300,000 – the tax office also demanded corporation tax and business rates. This amounted to a further 30%.
The appeals lodged against this decision before the Lower Saxony Finance Court, Case No. 10 K 285/15, and the Federal Finance Court, judgment of 6 December 2016, Case No. I R 50/16, were unsuccessful.
Unlike natural persons, legal entities do not have any privacy outside the scope of their business activities. Consequently, in the view of the Federal Fiscal Court (BFH), the principle that inheritances do not constitute taxable income cannot apply to them.
Similarly, it cannot be classified as a (hidden) capital contribution. Such a classification would only be possible if the payment were based on the corporate relationship. In the present case, however, it was precisely the operation of the care home that prompted the payment.
Furthermore, there is no principle in the area of commercial income to the effect that generous donations and earned income are mutually exclusive.
Ultimately, constitutional law does not protect against double taxation of an inheritance – through both corporation tax and inheritance tax – as there is no general principle requiring all types of tax to be coordinated with one another. Nor is there any principle requiring that corporations and natural persons should, in all cases, be taxed regardless of their legal form.
Conclusion: Gifts made free of charge to companies by third parties result in double taxation in the form of corporation tax and inheritance tax.