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.