What are the inheritance tax exemptions (Freibeträge) in Germany?

Germany's inheritance tax law (Erbschaftsteuer- und Schenkungsteuergesetz, ErbStG) provides personal tax-free allowances (Freibeträge) that apply to each heir individually. These allowances reset every 10 years, so systematic gifting over time can significantly reduce the overall tax burden.

The key exemption amounts per recipient are: €500,000 for spouses and registered civil partners, €400,000 for children (from each parent, so a child can inherit up to €800,000 from both parents combined tax-free), €400,000 for stepchildren, €200,000 for grandchildren (€400,000 if the grandchild's parent is already deceased), €100,000 for parents inheriting from children, and €20,000 for siblings, nephews, nieces, and all other persons including unrelated individuals.

Beyond the personal allowance, spouses and registered partners also receive a special household allowance (Besonderer Versorgungsfreibetrag) of €256,000. Minor children receive an additional maintenance allowance of up to €52,000, reduced by the present value of any surviving parent's pension obligation. The tax rates applied to amounts above the exemptions range from 7% to 50% depending on the heir's relationship to the deceased and the value of the inheritance. Family businesses and agricultural property benefit from special reliefs that can significantly reduce or defer the tax due.

This is general information only, not professional tax advice. Consult a qualified tax professional for your specific situation.