Abolition of the Austrian Inheritance Tax

Abolition of the Austrian Inheritance Tax

The Austrian Inheritance Tax is said to be abolished with the end of July 2008 (maintenance period). The Austrian Constitutional Supreme Court (Verfassungsgerichtshof) declared Sec. 1 Par. 1 null and void. Unconstitutional is not the Act itself, but the tax base regarding real estates (three times the assed value (3 facher Einheitswert)).

Inheritance Tax (the different treatment of assets)

Example: Inheritance with different kinds of assets, 4 children, no spouse.

Real estate
market value € 200.000,-
Child 1
tax base
three times the assed value
e. g. € 50.000,-
- general allowance € 2.200,-

Inheritace Tax
6% of € 47.800
€ 2.868,00

Sole proprietorship
market value € 200.000,-
Child 2

tax base
€ 200.000,-
- special allowance
-€ 200.000
final tax base
€ 0,00

Inheritance Tax
€ 0,00


Security portfolio
market value € 200.000,-
Child 3

tax free

Inheritance Tax
€ 0,00


Cash
market value € 200.000,-
Child 4

tax base
face value
- general allowance € 2.200,-

Inheritance Tax
8 % of € 197.800,-
€ 15.824,00

The tax difference between child 1 and child 4 triggered the tax investigation procedure by the Austrian Constitutional Supreme Court.

Vienna Legends

This week I was in Vienna. I had to attend a lecture of changes in tax law. During my ride on the train I read in the Book "Jaywalking with the Irish" that Irish people tend to believe in fairies and leprechauns. I think we do not. Most of the Austrian legends that I know tell about a relationship between a person and the devil. One of the best known Viennese legends in this respect is the one of

“The iron stump”

One day a young locksmith’s apprentice called Martin was sent to bring some loam from a pit outside the city walls. Instead of abiding by his master’s order he played with other boys and missed the time to return to the city before the city gates were closed. He feared to have to spend the whole night in the open air. Suddenly a little red-dressed man appeared and offered him money to pay the guards to reopen the city gates. Besides, he offered him his assistance to become a famous locksmith if Martin promised to go to the Holy Mass every Sunday for the rest of his life. Martin agreed without hesitation.

The following day the stranger came to his master’s workshop and ordered a special lock that could not be opened without the proper key. At first the master rejected the impossible looking job, but Martin talked him round to accept the order.

After many hours of exhausting work Martin managed to fulfil the task. When the stranger came into the shop again, he was very satisfied and ordered Marin to fix an old oak tree with this lock against the city wall on the Graben. Due to his unbelievable success his master terminated Martin’s apprenticeship right away and declared him a free journeyman. It dawned on Martin, slowly but surely, that he had maybe concluded a pact with the Devil.

Martin travelled through the world. After a few years he decided to return to Vienna, where the representatives of the local council endeavoured to get rid of the oak tree which was still fixed to the city wall. Martin offered to make a matching key. The Devil interfered in his work several times but eventually he succeeded in producing an appropriate key. He opened the lock and threw the key high up in the air and it never came back. The devil had taken the key again.

Martin observed carefully his duty to attend the Holy Mass every Sunday. One Sunday morning Martin’s friends talked him round to stay a bit longer with them to finish a card game. Martin remembered his weekly duty and ran to church. An old woman, who was lying, told him that the service had not even started yet. Martin returned to his friends to finish the game. However, the moment he heard the bells he realized that he had been tricked and missed the last chance to attend the mass. The Devil grabbed him and flew away. Later on his smashed and torn body was found near the old oak tree.

Since than it became a custom that every new locksmith’s journeyman would hit a nail into the old oak tree in memory of poor Martin’s fate.

View of my kitchen window

When I open my blinds in the morning I enjoy a wonderful view of the baroque Mariatrost Basilica on top of the Purberg hill which is one of the most famous pilgrimage churches of Styria/Austria.
The Angelus stair on the other side of the hill serves my girl friend and me as a hiking path at 5.40 in the morning. If you can spare the time join us.


(photo taken by Markus Zeitlhofer)

For a more detailed information have a look at http://en.wikipedia.org/wiki/Mariatrost_Basilica