If, following a person’s death, a Dispute over inheritance rights, it is not uncommon for the matter to be settled by way of a settlement. Under the terms of the settlement, the heir pays the A settlement for pretenders to the throne to ensure that, in return, he Recognises the payer’s status as an heir.
The Federal Fiscal Court had previously ruled that these payments do not constitute an acquisition subject to inheritance tax for the claimant to the inheritance. In the case now decided, the Federal Fiscal Court had to rule on whether the paying heir could nevertheless deduct the settlement payment as an estate liability for tax relief purposes. This question was answered in the affirmative, as there is no correspondence between the tax treatment of the claimant to the inheritance and that of the heir.
Contact at GWGL:
Kristin Winkler (winkler@gwgl-hamburg.de)