Careful when passing on: Here the heirs are threatened with bankruptcy!

Landauf and landab is spoken of the reform of the inheritance right, but hardly one wants to admit it, which there our government whipped clammy at changes by Bundestag and Bundesrat.

The German firearms trade is traditionally a family business, established for several generations and inherited from father to son.

In the 1960s, when the business was doing well, some real estate was purchased, most of which was owned by the business and thus counted toward the taxation of the business. The father would like to bequeath the business to his son, and most have already done so in their wills to prevent the business from being broken up by a community of heirs. However, due to the new inheritance tax reform, ill-advised companies may find themselves being driven into bankruptcy by the state as a result of the tax burden.


The biggest misconceptions: it’s all worth nothing

Nonsense – the tax office will tell you what it’s worth, and then comes the rude awakening. For example, owner-occupied properties where people leave apartments vacant because they can afford it. However, the tax office will take a theoretically achievable rent as a basis. The valuation basis for company values has changed drastically, so that even companies that do not actually yield much are nevertheless valued at astonishingly high sums.


Only the big boys are interested in that.

That’s right, and they are making provisions, such as Boris Becker or Müller-Milch, who – well advised – are leaving for more business-friendly foreign countries.


What’s the problem?

No one likes to deal with their own death, much less plan for their own inheritance.

With many gun dealers, I can always observe that the senior guy in the shop is already very close to the average life expectancy, but still believes that it would not work without him.

Even worse, bringing up the subject of inheritance is taken to mean that the son wants it paid off so he can squander it. On the one hand, the pension scheme, which is usually inadequate and independent of the company, is to blame for these concerns. Now I can’t rebuild in this article the father’s lack of confidence in the son’s business skills.

The way the older generation of war veterans thought, acted and felt led to the fact that these companies were built up with thrift and diligence in the post-war years. For this, this generation deserves thanks and recognition.

And this is where you have to pick up the father: he built up the company and made it what it is now with a lot of hardship and work, and now the government wants to expropriate him and reap the fruits of his labour.

What use is it that he always said that his son would inherit the business and his daughter the house to prevent inheritance disputes, if the state then demands so much inheritance tax that the business is bankrupt and the house has to be sold? cbo


by Dr. Johannes Fiala

With friendly permission

from (published in Büschenmacher Messer und Schere, issue 11/2006, page 12)

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Dr. Johannes Fiala Dr. Johannes Fiala

Dr. Johannes Fiala has been working for more than 25 years as a lawyer and attorney with his own law firm in Munich. He is intensively involved in real estate, financial law, tax and insurance law. The numerous stages of his professional career enable him to provide his clients with comprehensive advice and to act as a lawyer in the event of disputes.
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