If an heir cannot use the family home himself for health reasons, he does not lose the inheritance tax exemption for it. This was decided by the Federal Fiscal Court (BFH, ruling dated December 1, 2021 - II R 18/20). In the case at hand, a plaintiff had occupied the single-family house inherited from her father herself for a while. However, due to health problems, she had already moved out after seven years.
According to the BFH, tax exemption under Section 13 (1) No. 4c of the Inheritance and Gift Tax Act normally requires the heir to use the inherited family home himself for ten years. However, this is not the case if he is prevented from doing so for "compelling reasons". However, compelling reasons are probably very rare. According to the BFH, they require not only the case of impossibility, but also the unreasonableness of self-use of the family home.
In the current case, the plaintiff stated that due to health problems she could hardly move around in the single-family house and could not live there without outside help. In such cases, according to the BFH, one can no longer speak of independent household management. However, the tax court must now examine the extent of the plaintiff's health impairment, with her assistance.
Source and further information: bundesfinanzhof.de
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