Politics · Germany · 1 hr ago
Germany’s top court examines inheritance tax rules
Germany’s Constitutional Court is considering two challenges to the country’s inheritance tax rules this week.
Bavaria argues that states should control the tax and that inheritance allowances should rise because property values and prices have increased.
The federal government and the Green Party oppose Bavaria’s case, warning that separate state rules could fuel competition for wealthy families.
The court will also examine tax breaks that can sharply reduce or remove inheritance tax for people who inherit businesses.
A man who inherited shares and land from his aunt says those breaks unfairly favor business heirs over people who inherit private assets.
The court has ruled on inheritance tax several times, most recently in 2014, when it found that some benefits for very large businesses were not acceptable in their then-current form.
The hearings will consider whether the current rules comply with Germany’s constitutional guarantee of equal treatment.
Germany’s Federal Constitutional Court is hearing challenges to inheritance tax rules this week.
Bavaria is challenging the law, arguing that states should control the tax and that current tax-free allowances are unfair.
A separate hearing on Tuesday will examine tax breaks for people who inherit businesses.
The business-tax case was brought by a man who says heirs of business assets receive unfair advantages over heirs of private assets.
The court has ruled on inheritance tax in 1995, 2006 and 2014.
- Who
- Germany’s Federal Constitutional Court is hearing the cases. Bavaria and a private-asset heir brought challenges.
- What
- The court is examining state authority over inheritance tax, tax-free allowances and tax breaks for business heirs.
- When
- This week; Bavaria’s case is being heard on 12 October 2026, and the business-tax case on Tuesday.
- Where
- At Germany’s Federal Constitutional Court in Karlsruhe.
- Why
- Bavaria says the law and unchanged allowances are unfair and unconstitutional. The private-asset heir says business heirs receive preferential treatment.
Bavaria
Federal finance ministry and Green parliamentary group
Who should set inheritance tax
Bavaria
Bavaria argues the federal government lacks authority and the states should administer the tax.
Federal finance ministry and Green parliamentary group
They oppose Bavaria’s challenge to the inheritance tax law.
Regional tax rates
Bavaria
Bavaria seeks regional control, saying states could set their own rates.
Federal finance ministry and Green parliamentary group
Florian Meinel, commissioned by the Greens, warns this could trigger destructive tax competition and widen differences between wealthy and poorer states.
Tax-free allowances
Bavaria
Bavaria says allowances that have not changed for 16 years are unfair amid rising prices and property values.
Federal finance ministry and Green parliamentary group
The article does not state a specific response from the opposing parties on the allowance amounts.
We regionalize inheritance tax, then the SPD states can raise it massively - and we lower it
ruinous tax competition
The Federal Constitutional Court ruled on inheritance tax.
The Federal Constitutional Court ruled on inheritance tax again.
The court found that the rules then in force for tax breaks on very large business assets were not acceptable.
The court is hearing Bavaria’s challenge to the inheritance tax law.
The court is due to hear the case on tax breaks for business heirs.
- Court
- Federal Constitutional Court, Karlsruhe
- Bavaria’s case
- Challenges the inheritance tax law and seeks to put the tax in the hands of the states
- Allowance for spouses
- €500,000
- Allowance for children
- €400,000
- Business inheritance case
- Claimant inherited private assets, including a securities portfolio and land from his aunt
Sources
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