Revenue from Inheritance and Gift Taxes Forecast to Peak in 2024

X: Highest-Ever Income from Inheritance and Gift Taxes Forecasted for 2024 - Further details on the execution of the program will be provided by the Commission.

In 2024, Germany's tax office reported a significant increase in inheritance and gift tax revenues, marking an all-time high. According to the statistical office, this increase can be attributed to the decreased tax allowances, which are the most significant deductions in the calculation of inheritance and gift tax.

Prof. Dr. Sebastian Dullien, the scientific director of the Institute for Macroeconomics and Conjuncture Research (IMK) at the Hans-Boeckler Foundation, highlighted these developments in a recent article. He stated that tax revenues amounted to 13.3 billion euros, while tax allowances totaled 17 billion euros.

The office recorded a 1.5 percent decrease in allowances for inheritances, to 4.0 billion euros, and a 47.1 percent decrease for gift allowances in 2024, to 13.1 billion euros. The tax allowances include not only the tax-free allowances for inheritances of normal assets, but also large assets in the millions or billions range.

Since 2021, gift tax revenues have doubled, with the gift tax accounting for 4.8 billion euros of the total revenue in 2024, marking a 17.8 percent increase from 2023.

The Hans-Boeckler Foundation, in criticising the tax allowances, stated that they favour large fortunes in transfers, leading to a loss of revenue for the treasury. Eliminating these allowances could potentially bring in significantly higher additional revenues than the five billion euros that Chancellor Friedrich Merz aims to save through cuts to the citizen's allowance.

It is important to note that the gift tax and inheritance tax are crucial sources of revenue for the German government. The increased revenues in 2024 are a testament to the importance of these taxes in the country's fiscal policy.

The decrease in tax allowances in 2024 follows a significant increase in the previous year. This trend suggests a deliberate policy shift aimed at increasing tax revenues and reducing the benefits for large fortunes.

In conclusion, the 2024 tax year saw a significant increase in inheritance and gift tax revenues, reaching an all-time high. This increase can be attributed to a decrease in tax allowances, a policy shift aimed at increasing tax revenues and reducing benefits for large fortunes. The Hans-Boeckler Foundation has criticised these tax allowances, stating that they favour large fortunes in transfers, leading to a loss of revenue for the treasury.