Through its 2026 position, the DIHK sets forth clear guidelines – based on the 2014 ruling by the Federal Constitutional Court, which fundamentally confirmed the relief of necessary operating assets. The essence: Existing relief rules should remain in place, even if there is a need in specific areas to considerably simplify inheritance tax law.

The Constitutional Framework

In 2014, the BVerfG affirmed that lawmakers may favour business assets in inheritance and gift tax regulations to protect companies from tax-induced liquidity problems, safeguard jobs, and maintain the relevance of owner- and family-managed businesses at the domestic location. Relief is not a subsidy but an economically and constitutionally justified control norm. Heirs only receive tax exemption if they continue the business and maintain employment (measured by the wage sum) – thereby providing a tangible contribution. For large business assets of €26 million or more, additional need-based exemption testing applies, requiring heirs (or recipients) to contribute half of their private assets.

Inheritance tax revenues have recently risen significantly: in 2024, revenues amounted to around €9.9 billion, and nearly €15 billion is expected for 2025 – also because personal allowances have not been adjusted for 15 years. Inheritance tax revenues account for approximately 1.5 per cent of total tax revenue. Their potential to structurally change wealth distribution in Germany is therefore limited. More effective instruments for wealth creation include investments in education and measures to support private retirement provision.

Where is Action Needed?

Ten years after the reformed inheritance tax law came into effect, practical execution issues are emerging. The complexity of the law has reached a level that burdens legal certainty for businesses and tax authorities alike. Particularly critical: the simplified capitalised earnings method, with its currently overly high capitalisation rate of 13.75, systematically leads to overvalued business assets. The regulations on so-called administrative assets – i.e., the non-favoured part of business assets – are also challenging to handle in many cases. This is especially relevant for trading companies with high receivables and for groups where consolidated asset accounting must be carried out separately at each participation level.

Restrictions on disposal, which typically limit the free transferability of shares in partnerships and thus reduce their value, are not sufficiently considered in the current valuation. The inheritance tax law provides a pre-deduction for this, which only remains valid if the restrictions on disposal are not altered within 20 years after the transfer. Providing such proofs is practically a significant burden for successors.

DIHK Recommendations

• Retain the relief concept:
  The relief model confirmed by the 2014 BVerfG ruling should remain intact – without reducing the relief quotas of 85 per cent (regular relief) or 100 per cent (optional relief).
• Lower capitalisation rate:
  The Federal Ministry of Finance should reduce the capitalisation rate in the simplified capitalised earnings method from the current 13.75 to a corridor of 7 to 9 to ensure market-relevant valuation results.
• Consider restrictions on disposal during valuation: These value-reducing factors should be considered at the valuation level, not merely at the relief stage. The follow-up period should be reduced to five or seven years.
• Reform the 90 per cent eligibility test:
  The current 90 per cent threshold for administrative assets should be abolished or at least made practical with a consistent debt deduction.
• Flexibilise wage sum regulations:
  Business successors must be able to respond to external crises without losing the relief claim – they need clearly defined spaces to act.
• Simplify investment clauses and rules for young financial assets:
  Necessary liquidity injections – e.g., for crisis financing – must not pose tax risks in terms of inheritance tax.
• Reject state participation as a tax solution: Proposals to involve the state as a silent partner in family businesses contradict free market principles and would create enormous bureaucratic hurdles.

Download

The full DIHK paper with details can be downloaded here:

DIHK Position 2026 "Inheritance Tax: Relief of Business Assets as Basis for Growth, Employment, and Job Retention" (only available in German) (PDF, 462 KB)