Within political and economic circles, the following reform approaches are being discussed in particular.
One central proposal concerns the reduction of existing tax reliefs. In particular, preferential treatment currently afforded to business assets and so-called “family offices” may be curtailed or abolished altogether. The stated objective is to achieve a more uniform treatment of private and business assets.
In addition, there are calls to adjust personal allowances. Specifically, allowances applicable to more distant relatives and to unrelated persons may be reduced. This could lead to a significant increase in the tax burden on gifts and inheritances within more remote family or non-family constellations.
Further proposals include the introduction of higher tax rates. These are primarily aimed at substantial estates or higher tax brackets and would further increase the tax exposure of affected beneficiaries.
Another reform concept currently under discussion is the introduction of a so-called “lifetime allowance”. Under this model, each individual would be entitled to receive transfers of wealth, whether by gift or inheritance, up to an aggregate amount of EUR 1 million tax-free over the course of their lifetime. Any transfers exceeding this threshold would be subject to taxation, irrespective of the relationship to the deceased.
All of these proposals share a common direction of travel. Compared to the current legal framework, they would result in a higher overall tax burden. Existing allowances may be reduced or eliminated, and the scope for tax-efficient structuring would become more limited.
The present debate indicates that inheritance tax may become more restrictive and more costly in the future. It is therefore advisable to review existing wealth structures and succession arrangements at an early stage and, where appropriate, to implement or prepare suitable measures. Timely action can help mitigate adverse tax consequences in the event of reform and facilitate the transfer of wealth in a tax-efficient manner.