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#inheritance tax #gift tax #allowance #tax law #asset transfer 3 min

Inheritance & Gift Tax Calculator: Allowances and Calculation

Calculate inheritance or gift tax in Germany. Determine your personal allowances and the amount of tax due.

Deutsche Version verfügbar — auf Deutsch lesen.

Inhaltsverzeichnis
  1. Personal allowances by tax class
  2. Tax calculation step by step
  3. Leveraging the allowance reset
  4. Online tools for instant calculations

Personal allowances by tax class

The first step in any inheritance or gift planning is to determine the personal allowance. In Germany the allowance depends solely on the degree of kinship between donor (or deceased) and recipient. It ranges from €20,000 for distant relatives up to €500,000 for children and spouses. The system groups beneficiaries into three tax classes:

  •  Class I – spouses, children, grandchildren
  •  Class II – siblings, nieces, nephews
  •  Class III – friends, distant relatives

Only the portion of the transferred asset that exceeds the applicable allowance becomes taxable.

Tax calculation step by step

Once the allowance is known, the calculation is a straightforward subtraction:

Taxable amount = value of the transfer – personal allowance

The taxable amount is then hit with a progressive rate that also varies by tax class. The provided sources do not mention any general “hardship relief”, so you cannot rely on an additional exemption.

Why it matters: The larger the gap between the transfer value and the allowance, the higher the tax bill. Therefore it pays off to check early whether part of the estate can be structured to stay within the allowance.

Leveraging the allowance reset

A frequently missed lever is the reset of the allowance after a certain period. After some years the same personal allowance can be used again for the same recipient. This allows multiple gifts over a period of time, provided each individual gift stays below the allowance threshold. An illustrative example:

  1. Year 1: You give your child €500,000 – a substantial allowance for Class I. No tax is due because the gift does not exceed the allowance.
  2. Later date: After a certain period you can repeat the transfer, gifting another amount tax -free.

By applying this pattern, wealth can be passed across generations while remaining within the statutory allowances. The approach is documented in tax -planning literature and is recommended by many financial advisors because it stays fully within the legal framework.

Online tools for instant calculations

To avoid manual arithmetic, use an inheritance‑ and gift‑tax calculator. The calculator at steuertipps.de asks for tax class, personal allowance and the value of the transfer, then instantly shows whether tax is due and, if so, how much. For larger gifts that specifically target the allowance reset, the Schenkungsteuer‑Rechner on smart‑rechner.de provides a streamlined interface.

Practical benefit: With a single click you obtain an estimate that can be fed directly into your financial plan. This helps you avoid surprises at tax time and decide the optimal timing for additional transfers.

By systematically (1) identifying the correct personal allowance, (2) calculating the taxable portion, (3) exploiting the allowance reset, and (4) validating the numbers with an online calculator, you can considerably shrink your inheritance‑ and gift‑tax burden while staying fully compliant with the law.

Try it yourself: Inheritance & Gift Tax Calculator

Sources