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Care of the parents reduces inheritance tax
(Jur). If children care for their parents, they will be entitled to a deduction on the inheritance tax after their death in the case of inheritance. The allowance can not be denied by the tax office so far common argument that the children are anyway required by law to care or upkeep their parents, decided the Federal Finance Court (BFH) in Munich in a judgment published on Wednesday, July 5, 2017 (Ref .: II R 37/15).
In the case of inheritances, the Inheritance Tax and Gift Law provides for different allowances. Thus, spouses and registered partners have an inheritance amount of 500,000 euros, grandchildren of 200,000 euros, parents and grandparents in the amount of 100,000 euros and unrelated persons a deduction of only 20,000 euros.
(Image: JPC-PROD / fotolia.com) Inheritance tax will be payable on amounts in excess of these allowances. In addition to these allowances, however, a non-exemption amount of up to € 20,000 can be claimed, provided that the deceased deceased was regularly cared for free or against insufficient wages before his death.
In the case now decided, the plaintiff, who came from Lower Saxony, had also asserted the exemption amount. She had cared for her mother at home for years at her expense. The mother was dependent on nursing for ten years and received care allowance of 700 euros per month after the care level III.
When the mother finally died, the daughter was considered a heir. The legacy included a bank balance of around 785,000 euros.
The tax office then stopped at the daughter's hand. She should pay 4,865 euros inheritance tax. The Treasury refused to take into account the deductible allowance. After all, the daughter was obliged to look after her mother anyway. Only with a voluntary care but the free allowance can be claimed.
The BFH contradicted this in its judgment of 10 May 2017. A statutory maintenance obligation towards his parents was not opposed to granting the allowance. Nor does it follow from the duty to provide assistance and consideration between parents and children laid down in the Civil Code that the children are generally obliged to provide personal care. Since usually care services are provided within the family, in particular between children and parents, the allowance scheme would be almost empty on exclusion of this group of people, said the Munich judge.
In the end, the legislator wanted to reward the provision of care services for tax purposes. In providing long-term, intensive and comprehensive care services - as in the specific case - the allowance could be granted even without individual proof of the expenses incurred. In addition, the allowance may be claimed even if the testator was in need of care but was not entitled to depend on his own assets in individual cases.
In order to be able to claim the allowance, the BFH had already decided on 11 September 2013 that heirs must in principle conclusively explain and render credible the care provided (Ref .: II R 37/12, JurAgentur Report dated 20 November 2013).
There is a need for help because of illness, disability or because of age. In the case of persons over the age of 80, a need for help should in principle be assumed. fle