SPD plans inheritance tax reform: threat to family businesses?

SPD plans inheritance tax reform: threat to family businesses?

In the current discussion about the planned inheritance tax reform, the topic is now coming to the fore. The SPD has put forward proposals that are interpreted as both a fair wealth redistribution measure and a potential attack on German entrepreneurship. How financial market world reports, a tax allowance of 5 million euros is to be introduced for the company value, which would be exempt from the new inheritance tax. That sounds positive at first, but critics warn that many small, family-run businesses could exceed this limit and would therefore be affected by the tax levy.

Another point is the possibility for heirs to pay off the inheritance tax from company profits over a period of 20 years. This raises questions: What happens if the company doesn't make a profit? A clear example illustrates the problem: If you inherit a company worth 100 million euros, you have to pay 20 million euros in inheritance tax, even though you only have 1 million euros in cash.

Fair distribution or burden on companies?

The SPD sees the reform as a question of justice, as small inheritances are currently usually taxed higher than large ones. To change this, they are also aiming to introduce a “life allowance” that includes one million euros for private inheritances: 900,000 euros tax-free within the family and 100,000 euros to third parties. This regulation would apply throughout life if the SPD's proposals become reality. Further details about the current regulations, such as allowances for spouses and children, will also be highlighted in the debates br.de.

But the discussion remains tense: the CSU vehemently rejects the proposals and describes them as “anti-performance.” She even calls for the abolition of inheritance tax. In addition, the Federal Constitutional Court plans to rule on inheritance tax in 2026, which could further influence potential changes to the law. The question here is how the reform will actually be implemented and what consequences this could have for entrepreneurship in Germany.

The opinions of the experts

Economists' opinions on the SPD's proposals are divided. While Clemens Fuest from the Ifo Institute warns of falling investments, Monika Schnitzer from the economists sees higher taxes as sensible and fears no negative effects on companies. The business associations, on the other hand, criticize the reform as an additional burden for family businesses and medium-sized businesses.

Overall, it is clear that the debate about the inheritance tax reform in Germany is of great importance not only politically but also economically. Whether the SPD concepts will actually be put into practice remains to be seen, as does the reaction of business and citizens.