international tax-law rental-property inheritance federal-tax-law
What&#39;s the point of an inheritance tax on movable property? Can&#39;t valuable property be shipped to a country without the tax, and be inherited there?
<p>This probably wouldn't happen for property that's low value and bulky, like furniture. But for property like yachts, planes, artwork, jewellery, etc., it seems easy to move it to a country without inheritance taxes since the relocation costs would only be a small percentage of the total value.</p>
<p>Am I missing something here?</p>
<p>(I know the U.S. has a special law to tax overseas citizen, which almost no other country has. But the inheritance tax system predates that, and international travel was still straightforward back then for those with means.)</p>
<p>EDIT: Originally mentioned luxury cars but then realized it isn’t a good example as cars need to be legally imported back into the country, and thus pay import taxes, to be useful. This doesn’t apply to planes or yachts though in countries that allow foreign flagged yachts or foreign registered planes to operate. Personal items such as jewellery would probably also not have any import taxes imposed when the heir brings them back.</p>

<p>In <a href="/questions/tagged/germany" class="post-tag" title="show questions tagged &#39;germany&#39;" aria-label="show questions tagged &#39;germany&#39;" rel="tag" aria-labelledby="germany-container">germany</a> inheritance tax (Erbschaftsteuer) taxes someone <em>receiving</em> an inheritance (or a gift - they are treated the same).
If the heir is (inheritance tax) resident in Germany, German inheritance tax is due in principle on the whole received property, regardless of where that property is.</p>
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<li><p>Paid foreign inheritance tax on particular types of property and in accordance with tax treaties can be deducted. (Details: see <a href="https://www.gesetze-im-internet.de/erbstg_1974/__21.html" rel="noreferrer">§21 ErbStG</a> and <a href="https://www.gesetze-im-internet.de/bewg/__121.html" rel="noreferrer">§121 BewG</a>)</p>
<p><em>Wrt the scenario in the question: if that foreign country collects low/no inheritance tax, the heir gets accordingly low or no deduction from the due German inheritance tax.</em></p>
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<li><p>Whether the &quot;more mobile&quot; property in the question counts as foreign property or not depends on whether the deceased was German resident in the sense of inheritance tax law or not (e.g. moved their residence to the foreign country &gt; 5a before their death), but again, that wouldn't lower the total amount of taxes due, it only shifts who gets them.</p>
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<p>In order to actually avoid German inheritance tax on the mobile property of the question, the heir would need to move their tax residency away from Germany.</p>

<p>In the United States, inheritance taxes don't depend on the location of the property. They depend on the location where the estate was probated.</p>
<p>Usually inheritance taxes are only state taxes and are applied in the state where the person was resident at the time of their death. However, if the total value of the estate exceeds $12 million, then there is a Federal inheritance tax as well.</p>

<p>Let’s say your grandma owned a diamond ring worth 100,000. If you take it abroad after she dies to avoid inheritance tax, that’s tax evasion. If you move it before she dies, you might have to pay custom taxes, you may have to pay taxes for receiving a gift worth 100,000, you might have to pay inheritance tax abroad, and if you don’t tell other heirs who would like their share of the 100,000, that might be fraud or theft.</p>
<p>So I don’t see any reason not to have inheritance tax.</p>
