Spouses or partners who inherit a property are supported by the legislator with inheritance tax concessions. The aim is to enable them to keep their residential property in the family and thus protect the family living space. The financial support takes the form of an inheritance tax exemption for inherited real estate. However, these benefits are conditional on the inherited property not being sold or given away by the heir for a period of at least ten years.
In a court ruling (AZ II R 38/16) of the Federal Fiscal Court (BFH) Munich, the sole heiress and wife of her deceased husband must now repay the tax benefits retroactively, in accordance with Section 13 (1) No. 4b ErbStG. The reason for this is that she gave away the inherited single-family house to her daughter after only a short time and merely reserved the lifelong right of residence. This is not what the legislator intended, as the tax benefits only apply in the case of owner-occupation for residential purposes.
According to the ruling, if the property is inherited or given away as a gift, this is contrary to the legislator's actual funding objective, which it aims to achieve with the tax benefits for inherited property. Likewise, it is not the purpose to inherit the property tax-free and then resell it.
Source: BFH
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