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Original poster

Inheritance issue - how does it work across borders?

53 replies

WidowWadman · 20/12/2012 19:38

Just looking on pointers were to ask. My aunt has died this week and it turns out that me and my brother and I are her beneficiaries.

We don't know yet how much there is (if anything), and there's complicating (I think) matters.

My aunt, my brother and I are all German nationals. My aunt lived in the Netherlands, where she had a flat, but she had also some bank accounts in Germany.

I'm a UK resident, and whilst I have a German bank account, there's precious little in there, and all my income is UK based and I pay UK taxes.

So how does the inheritance work tax wise? How do I best get it transferred to a UK account. How do I decide what type of account to open to park the money (depending how much it is)?

If it turns out that the inheritance isn't assets but only debts, how do I get out of it?

What questions do I need to ask when it comes to discuss the whole thing with the executor?

I will not be able to attend the first meeting in person, so will send my dad in my place which makes it more difficult. I know my dad has my best interests at heart, but I don't know whether he really knows how this whole shebang works either, so I'd rather give him a list of points to work through.

OP posts:

digerd · 20/12/2012 22:27

Now inheritance tax was also different. So much for the spouse allowed and all legal heirs - children- non-legal heirs the Tax free inheritance was then only 10,000DM. But as heirs live in UK, not sure about how that would work. And as the deceased had no legal heirs - blood line children- not sure how niece's and nephews are catagorised.

TalkinPeace2 · 20/12/2012 22:28

digerd I fully get paying debts out of the estate - that is standard everywhere.
My question (and OP's question) was : what happens if debts exceed assets
you implied that the beneficiaries would become liable for those debts
which I genuinely find unlikely.

Mousy "solicitors specialising in international inheritance" is a sure fire way to lose the balance of the estate.... if all the assets were in Germany and the Netherlands and mainly property, bank and shares its no great shakes to crystallise the estate....

TalkinPeace2 · 20/12/2012 22:30

widow
YOU do not pay the bills. The estate pays the bills and you get the net amount.
Read through those links I posted.
As a beneficiary you just have to sit and wait.

and the tax free allowances are now in line with those elsewhere in the Schengen zone and the UK

digerd · 20/12/2012 22:31

Just a warning that you should not fall foul of the german laws, their punishments are harsh.
I knew all about my husbands finances and as I was his wife with everything in our joint names, I had no problem. Except with MIL who sued me for her bit.

digerd · 20/12/2012 22:32

ps
it was a 3-year nightmare

TalkinPeace2 · 20/12/2012 22:35

Oh digerd, that is awful
the UK tax system keeps me in beer, but at least who stuff is left to is up to the individual.

digerd · 20/12/2012 22:37

I know that debts will be inherited, but not the details, as I had none, thankfully, due my dear sick husband settling things for me. But he did warn me to refuse it 2 years before, as I would only inherit debt.

Pantofino · 20/12/2012 22:37

Talkinpeace - that is standard in Belgium too - if the estate has debts, you can refuse to inherit if you choose.

TalkinPeace2 · 20/12/2012 22:41

Aha, I understand (I think)
so the net debt would technically be passed on, but as the heirs can choose to reject, effectively the debt has to be written off

in the UK and US version, if the estate drops to zero, thats that and the beneficiaries are given no option.

digerd · 20/12/2012 22:42

There was a thread regarding inheritance in Uk and a girl in France posted that she had no right to inherit anything from her DH and she was aghast. If french people have no children together, they have to make 2 wills leaving their estate to their blood line, whether children or siblings/parents. But they are obliged in law to be responsible for blood line parents financially/care.

digerd · 21/12/2012 08:50

I once contacted a german solicitor based in London and asked for a translation of a certain law regarding my case, and for 3 pages I was charged £433 - 13 years ago.

digerd · 21/12/2012 09:15

You can get free basic info from the Amtsgericht re. inheritance, but what the time limit is to formally reject the inhertance, don't know if they can answer that question. I also contacted the Testament Eroefnungs Abteilung, and they give me the correct info that my own solicitor got wrong.!! All for free

digerd · 21/12/2012 13:48

Just read on a website about the new inheritance tax laws in Germany which were changed in 2009,10 and 11.
As a niece and nephew you are both in class 2 and the tax free allowance is only EURO 20,000 for each of you, under german tax laws.

There was also a paragraph about german citizens domicile in and outside Germany but rather complicated and brain went haywire by then.

digerd · 21/12/2012 13:50

ps
Not sure if it was for each of you or both together.

CinnabarRed · 21/12/2012 13:54

Just want to say that swathes of legal stuff talked about on here isn't tax law - it's the law of intestacy.

It's quite clear from this thread that the laws vary enormously from country to country. My recommendation (as a tax lawyer!) is to get local legal representation.

TalkinPeace2 · 21/12/2012 13:54

Looking at this
www.schweizer.com.au/articles/German_Inheritance_Taxes_(SK00131316).pdf
there is an additional allowance of E 12,000 for chattels
and as the main property was not in Germany, it may not come under the E 20,000 block - that will apply to the savings and any shares

all up OP, keep your uncle sweet and it should all be fine.
the 30% tax rate is lower than the UK's 40% !

TalkinPeace2 · 21/12/2012 13:56

Cinnabar Absolutely - OP has her Uncle dealing with it, but wanted to get more info.
Poor digerd knows more about the system than anybody should have to.

digerd · 21/12/2012 17:27

Talkin
Indeed, and you don't know the half of it - thanks for the sympathy, much appreciated.

I paid no inheritance tax as the spouse, which was at the time in 1997, DM 424.000 non-taxable allowance for me. Now I see it is Euro 500.000.
It was the claim from MIL that was a nightmare for me. She also had 10 other grown-up children and 25 adult grandchildren, so needed no money from me, but, the german law gave her the unconditional right as I had been unable to conceive with DH and he died childless.

Original poster

WidowWadman · 22/12/2012 07:40

Thanks for all the hints and links and comments.

OP posts:

Original poster

WidowWadman · 30/12/2012 20:19

cinnabar - "My recommendation (as a tax lawyer!) is to get local legal representation. "

Should I look for Dutch or German representation? I've done a lot of Googling, but all I find contradicts each other, as to whether German or Dutch law applies? She'd lived for about 15 years (if not longer) in the Netherlands, but as a German national. Some site suggests we would have to pay tax in both Germany and the Netherlands?

The will had been drawn up in Germany - and from my understanding from googling was 'fixed' (as in not changeable anymore) with the death of my uncle.

OP posts:

SolomanDaisy · 30/12/2012 20:36

My understanding is if your aunt/uncle wanted German rather than Dutch law to apply they would have had to register that with a notary in the Netherlands. If they didn't do that Dutch law will apply. I think that would mean the will wasn't valid, as Dutch wills need to be lodged with the state. But if they did register their choice of German law with a notary, German law and taxation will apply.

Original poster

WidowWadman · 30/12/2012 20:40

They were already residents of the Netherlands when the will was drawn up in Germany. We had been sent a copy of the will by the German court it was registered at, after the death of my uncle.

OP posts:

suburbophobe · 30/12/2012 21:21

You cannot inherit debts

Yes you can in NL.

Just like your inheritance automatically goes to your wife and children. (or barring that, other family). One of the reasons they were the first country to bring in gay marriage (inheritance rights to your spouse).

I also know there is something like a tax agreement in Europe between countries so you do not have to pay in each country.

Really OP, best to get legal advice for your particular situation, --rather than get confusing posts on a forum
on a very difficult subject--.

International tax lawyers is your best bet.

suburbophobe · 30/12/2012 21:40

She'd lived for about 15 years (if not longer) in the Netherlands, but as a German national. Some site suggests we would have to pay tax in both Germany and the Netherlands.

The fact that she is German living in NL is neither here nor there (EU, remember). She would fall under Dutch tax law.

You need to get her SOFI nr. (SOcial FIscal) now known as Burger Service number, from there you can phone and ask at the Dutch tax office (but they know shit all)

www.belastingdienst.nl/wps/wcm/connect/bldcontenten/belastingdienst/individuals/living_and_working/tax_treaties/tax_treaties_and_income_from_different_countries_sitegbied/tax_treaties_and_income_from_different_countries

suburbophobe · 30/12/2012 21:45

even their website doesn't work!

www.belastingdienst.nl/wps/wcm/connect/bldcontenten/belastingdienst/individuals/

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