Last revised 13 October 2026. Figures and rules stated are those in force on 15 September 2026. What Germany taxes on an American estate, what the convention gives back, and the transfer certificate the bank will ask for.
For a beneficiary living in Germany, German inheritance tax applies to the whole of what is received, wherever the assets lie, because the charge follows the acquirer’s residence. The estate tax treaty confirms that charge rather than removing it, and provides a credit rather than an exemption.
Whether the credit is worth anything depends on whether American estate tax was actually paid. Below the United States exclusion no federal estate tax arises, so there is nothing to credit and the German tax is the only transfer tax on the inheritance. That is the ordinary case, and it is the opposite of what most families expect.
What usually has to happen, and in what order
Give the three-month notice first
The duty is the beneficiary’s own and runs from learning of the acquisition, on estimated figures if necessary, with the return corrected later. Waiting for the American estate to close usually means the three months are long gone.
Establish how the inheritance actually arrives
A probate distribution, a transfer-on-death or payable-on-death designation, a joint account and a revocable trust that terminates are four different routes, and German law does not treat them alike. The route changes the date of the acquisition and sometimes the acquirer.
Expect the American account to be frozen if the decedent was not American
Where the decedent was neither a United States citizen nor a resident, the custodian will generally wait for an IRS transfer certificate before releasing anything. It takes many months and usually requires a Form 706-NA first, on a threshold of 60,000 dollars of United States situs assets.
Work out the German valuation, which is not the American one
Germany values on its own rules and in euros, there is no basis step-up to comfort anyone, and the exchange rate on the date of the acquisition matters. Two correct valuations of the same asset can differ substantially.
Claim the credit properly, or not at all
The credit requires the American estate tax to be apportioned to this beneficiary’s share on the Form 706 values, and proof of payment. Without both, Germany credits nothing. The two assessments rarely arrive together, so the American figures usually have to be chased.
Keep the American reporting separate in your mind from the tax
The inheritance is not American income, and it is still reportable by a United States person. Form 3520 above the threshold, then FBAR and Form 8938 for whatever is now held. The penalties are measured against amounts rather than tax.
What to have ready
- The date you learned of the acquisition.
- How the assets reach you: probate, beneficiary designation, joint account or trust.
- Your German address, residence date and citizenships.
- The decedent’s citizenship and domicile at death.
- Whether a Form 706 or 706-NA is being filed, and by whom.
Nothing on this page is legal or tax advice, and no page can settle a case. Where a matter is live, the steps above are what a first conversation works through.
Request an initial consultation