inheritance tax
noun · Erbschaftsteuer
Erbschaftsteuer, but built the other way round from the UK tax: it taxes each acquirer on what they receive, not the estate as a whole, and the rate and the tax-free amount turn on the relationship, § 15 and § 16 ErbStG, not a single nil-rate band.
Which translation, when
Why
Inheritance tax translates as Erbschaftsteuer, and the word is safe while the structure behind it is not. The UK tax falls on the estate as a whole at death, above a nil-rate band, at a single rate. German law taxes the acquisition, not the estate: each acquirer is charged on the enrichment they receive, so an estate split among several people generates several separate charges rather than one. What each pays turns on the relationship to the deceased. Section 15 ErbStG sorts recipients into three Steuerklassen, from spouse and children in class one down to unrelated persons in class three; § 16 ErbStG gives each a Freibetrag, currently 500,000 euros for a spouse and 400,000 for a child but only 20,000 in class two; and § 19 ErbStG sets the rate accordingly, from seven per cent up to fifty. So rendering inheritance tax as Erbschaftsteuer is correct, but reasoning about it as though it worked like the estate-based Inheritance Tax Act 1984, one band and one rate for the whole estate, gets the German charge wrong on who is taxed and how much. The figures move, so they should be checked against the current ErbStG before they are relied on.
Typical mistakes
- German Erbschaftsteuer is acquisition-based: it charges each recipient on their share, § 10 ErbStG, not the estate as a whole, so treating it as a UK-style estate tax misstates who bears it.
- The allowance and the rate depend on the relationship, § 15, § 16 and § 19 ErbStG, not on one nil-rate band, so a single threshold for everyone is wrong; the exact figures move and need checking.
- Erbschaftsteuer is the tax; the estate itself is the Nachlass, and confusing the tax with the estate mixes a charge on the recipient with the body of assets it is levied on.
What matters
A cross-border estate reaching German heirs needs the charge described as it is: each heir taxed on their own share, § 10 ErbStG, with an allowance and a rate set by their relationship, § 15, § 16 and § 19 ErbStG. Carrying over the UK estate-based model, one band across the whole estate, produces the wrong picture of who owes what.
What the machine misses
Machine output renders inheritance tax as Erbschaftsteuer, which is right, and then carries the English assumptions with it. The German tax charges each acquirer on their share, § 10 ErbStG, not the estate as a whole, and the allowance and rate follow the relationship, § 15 and § 16 ErbStG, not one nil-rate band. A translated calculation that treats it as an estate tax with a single threshold misstates both who is taxed and how much.
Examples
| liable to inheritance tax | der Erbschaftsteuer unterliegen |
| the inheritance tax allowance | der Freibetrag bei der Erbschaftsteuer |
| inheritance tax on the acquisition | Erbschaftsteuer auf den Erwerb |
| exempt from inheritance tax | von der Erbschaftsteuer befreit |
More notes on these sections
gift tax Schenkungsteuer