In August 2026, the Fede\u00adral Con\u00adsti\u00adtu\u00adtio\u00adnal Court (BVerfG) will hold oral hea\u00adrings in two cases con\u00adcer\u00adning the con\u00adsti\u00adtu\u00adtio\u00adna\u00adli\u00adty of the Ger\u00adman inhe\u00adri\u00adtance tax. The rulings them\u00adsel\u00adves are not expec\u00adted to be han\u00added down until seve\u00adral months later. For pri\u00adva\u00adte indi\u00advi\u00addu\u00adals and busi\u00adness owners who wish to inhe\u00adrit or lea\u00adve an inhe\u00adri\u00adtance, the\u00adse cases are of con\u00adsidera\u00adble prac\u00adti\u00adcal importance.<\/p>\n
The oral hea\u00adring in the pro\u00adcee\u00addings 1 BvF 1\/23<\/strong> takes place on 12 August 2026<\/strong> The case was brought by the Bava\u00adri\u00adan Sta\u00adte Govern\u00adment. It con\u00adsiders the Inhe\u00adri\u00adtance Tax Act to be uncon\u00adsti\u00adtu\u00adtio\u00adnal on for\u00admal grounds alo\u00adne: the Fede\u00adral Govern\u00adment may only regu\u00adla\u00adte inhe\u00adri\u00adtance tax uni\u00adform\u00adly across the coun\u00adtry if this is neces\u00adsa\u00adry to ensu\u00adre equi\u00adva\u00adlent living con\u00addi\u00adti\u00adons. Bava\u00adria con\u00adsiders this requi\u00adre\u00adment under Artic\u00adle 72(2) of the Basic Law not to have been met.<\/p>\n Fur\u00adther\u00admo\u00adre, Bava\u00adria is chal\u00adlen\u00adging the sub\u00ads\u00adtance of the cur\u00adrent tax-free allo\u00adwan\u00adces under Sec\u00adtion 16 of the Inhe\u00adri\u00adtance Tax Act (ErbStG) and the tax rates under Sec\u00adtion 19 of the Inhe\u00adri\u00adtance Tax Act (ErbStG). Spe\u00adci\u00adfi\u00adcal\u00adly, it is argued that the legis\u00adla\u00adtu\u00adre has fai\u00adled to adjust the\u00adse amounts to reflect rising pri\u00adces for years. Fur\u00adther\u00admo\u00adre, the tax-free allo\u00adwan\u00adces do not take into account the fact that pro\u00adper\u00adty in Munich or Ham\u00adburg cos\u00adts many times more than it does in rural are\u00adas, for exam\u00adp\u00adle. From a con\u00adsti\u00adtu\u00adtio\u00adnal per\u00adspec\u00adti\u00adve, Bava\u00adria bases this chall\u00adenge on the gua\u00adran\u00adtee of pro\u00adper\u00adty rights under Artic\u00adle 14 of the Basic Law, the pro\u00adtec\u00adtion of mar\u00adria\u00adge and the fami\u00adly under Artic\u00adle 6 of the Basic Law, and the gene\u00adral prin\u00adci\u00adple of equa\u00adli\u00adty under Artic\u00adle 3 of the Basic Law.<\/p>\n On 13 August 2026<\/strong> The court is hea\u00adring the case as part of con\u00adsti\u00adtu\u00adtio\u00adnal appeal pro\u00adcee\u00addings. An heir who, fol\u00adlo\u00adwing the death of his aunt, inhe\u00adri\u00adted sole\u00adly pri\u00adva\u00adte assets \u2013 inclu\u00adding a secu\u00adri\u00adties port\u00adfo\u00adlio and pro\u00adper\u00adty \u2013 con\u00adsiders the une\u00adqual tax tre\u00adat\u00adment com\u00adpared with heirs to busi\u00adness assets to be unconstitutional.<\/p>\n Back\u00adground: The Inhe\u00adri\u00adtance Tax Act pro\u00advi\u00addes for far-rea\u00adching exemp\u00adti\u00adons for busi\u00adness assets. Anyo\u00adne who inhe\u00adrits a busi\u00adness may, under cer\u00adtain con\u00addi\u00adti\u00adons, bene\u00adfit from sub\u00adstan\u00adti\u00adal tax exemp\u00adti\u00adons. By con\u00adtrast, anyo\u00adne who inhe\u00adrits cash assets, secu\u00adri\u00adties or a let pro\u00adper\u00adty pays the full rate of tax wit\u00adhout any com\u00adpa\u00adra\u00adble reli\u00adef. The com\u00adplainant regards this as a dis\u00adcri\u00admi\u00adna\u00adti\u00adon that is not jus\u00adti\u00adfied under con\u00adsti\u00adtu\u00adtio\u00adnal law and unsuc\u00adcessful\u00adly pur\u00adsued the mat\u00adter through the spe\u00adcia\u00adlist courts befo\u00adre appe\u00adal\u00ading to the Fede\u00adral Con\u00adsti\u00adtu\u00adtio\u00adnal Court.<\/p>\n Both approa\u00adches could fun\u00adda\u00admen\u00adtal\u00adly call into ques\u00adti\u00adon inhe\u00adri\u00adtance tax in its cur\u00adrent form. The fol\u00adlo\u00adwing sce\u00adna\u00adri\u00ados are con\u00adceiva\u00adble fol\u00adlo\u00adwing a court ruling:<\/p>\n Until the jud\u00adge\u00adments are han\u00added down, the cur\u00adrent law remains appli\u00adca\u00adble. Anyo\u00adne who is curr\u00adent\u00adly plan\u00adning a sub\u00adstan\u00adti\u00adal inhe\u00adri\u00adtance or gift, or who is alre\u00ada\u00addy facing an ongo\u00ading inhe\u00adri\u00adtance tax assess\u00adment, should keep an eye on fur\u00adther deve\u00adlo\u00adp\u00adments. In ongo\u00ading pro\u00adcee\u00addings, it may be advi\u00adsa\u00adble to lodge an appeal and app\u00adly for the pro\u00adcee\u00addings to be stay\u00aded in order to bene\u00adfit from a poten\u00adti\u00adal\u00adly favoura\u00adble ruling by the Fede\u00adral Con\u00adsti\u00adtu\u00adtio\u00adnal Court. In any case, indi\u00advi\u00addu\u00adal tax or inhe\u00adri\u00adtance law advice is high\u00adly recommended.<\/p>\nSecond case: Is the preferential treatment of business assets constitutional?<\/h2>\n
What does this mean for heirs and donors?<\/h2>\n
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