- Siblings inherit in Steuerklasse (tax class under ErbStG) II under § 15 ErbStG — with only a EUR 20,000 Freibetrag (personal tax-free allowance) almost always taxable
Siblings are at a tax disadvantage when inheriting. German Erbschaftsteuer treats siblings legally on the same level as stepchildren, divorced spouses and distant relatives — and more expensively than any other "real" family member. In my practice I regularly see siblings pay five- to six-figure amounts to the tax office after the death of their brother or sister.
A sibling inheritance is the most expensive variant within the family. EUR 20,000 Freibetrag and 15 percent tax from the first euro above that. With childless siblings who want to leave their wealth to each other, structural planning 10-15 years before death is almost always economically worthwhile.
Why siblings are treated so poorly
The ErbStG knows three tax classes. Steuerklasse I comprises the closest relatives (spouses, children, parents on inheritance, grandchildren). Steuerklasse II covers siblings, nieces, nephews, step-parents, sons- and daughters-in-law and divorced spouses. Steuerklasse III all others.
Siblings were downgraded from Steuerklasse I to II in 2009. Since then, inheritances among siblings are almost always taxable — with the low Freibetrag of EUR 20,000, in practice every relevant acquisition has tax consequences.
Steuersaetze for siblings (Class II)
| Value over Freibetrag | Steuersatz |
|---|---|
| up to EUR 75,000 | 15 % |
| 75,000 – 300,000 EUR | 20 % |
| 300,000 – 600,000 EUR | 25 % |
| 600,000 – 6,000,000 EUR | 30 % |
| 6,000,000 – 13,000,000 EUR | 35 % |
| 13,000,000 – 26,000,000 EUR | 40 % |
| over EUR 26,000,000 | 43 % |
Comparison: children at the same level pay 7-30 percent. Siblings therefore almost always pay twice as much or more.
Worked examples from practice
Example 1: brother inherits EUR 200,000 from his sister
Class II, Freibetrag EUR 20,000. Taxable: EUR 180,000. Steuersatz: 20 percent (second bracket). Erbschaftsteuer: EUR 36,000.
For comparison: had the sister's child (the nephew) inherited — same Class II, same Freibetrag. Had the sister's adopted child inherited — Class I, EUR 400,000 Freibetrag, EUR 0 tax.
Example 2: sister inherits EUR 500,000 from her brother
Class II, Freibetrag EUR 20,000. Taxable: EUR 480,000. Steuersatz at this bracket: 25 percent (third bracket). Erbschaftsteuer: EUR 120,000.
With a child as Erbe (heir) the tax would be EUR 11,000 (Class I, EUR 100,000 above EUR 400,000 Freibetrag x 11 %). Difference: EUR 109,000.
Example 3: two siblings inherit EUR 600,000 from their brother in equal shares of EUR 300,000
Each sibling: Class II, Freibetrag EUR 20,000. Taxable EUR 280,000 each. Steuersatz: 20 percent. Tax EUR 56,000 each. Total EUR 112,000.
Step by step: optimise the sibling inheritance in 6 stages
For childless siblings who want to leave their wealth to each other:
- Asset inventory. What does each have, what should go where?
- Consider lifetime restructuring. Familienpool as a GmbH & Co. KG, joint asset-managing GmbH — creates equity interests instead of estate transfers.
- Build chains of Schenkungen. Schenkungen every 10 years (EUR 20,000 Freibetrag per donor relationship) — over decades, significant amounts.
- Legacies instead of being named as Erbe. Legacies can in certain constellations be more tax-efficient than being named as Erbe.
- Consider adopting nieces or nephews. Nieces/nephews become adopted children in Steuerklasse I.
- For larger wealth, Familienstiftung (family foundation). From EUR 2-5 million the foundation solution often pays off for siblings.
Strategy 1: Familienpool as a joint vehicle
For two childless siblings with larger wealth, a Familienpool as a GmbH & Co. KG often pays off. Both bring their wealth into the pool, each holds 50 percent. If one sibling dies, they bequeath their pool share — the second then holds 100 percent.
Advantage: structured management already during their lifetime, clear succession, less conflict. Disadvantage: Erbschaftsteuer still arises on the take-over of the deceased's pool share — the economic burden is not eliminated.
More on this: Set up a Familienpool as a GmbH & Co. KG.
Strategy 2: adoption of nieces or nephews
Tax-wise the most powerful lever. If a childless sibling adopts a child of their brother or sister, the child becomes legally an adopted child in Class I — Freibetrag EUR 400,000 instead of EUR 20,000.
Requirements:
- Adult adoption under §§ 1767 ff. BGB possible
- Notarisation
- Moral justification required
- Family-law consequences (Pflichtteil (compulsory share, § 2303 BGB) claims of the biological parents, name change)
In practice I rarely use this strategy — the family-law implications are wide-ranging. But for very large wealth the tax saving (often six-figure) can justify the effort.
Strategy 3: legacy instead of being named as Erbe
In some constellations a legacy (a monetary claim against the heirs) is more tax-efficient than being named as direct Erbe. The legatee has no direct asset acquisition but a monetary claim — which is taxed under the same rules but allows different distribution mechanisms.
Practical example: a brother has a daughter (Class I, EUR 400,000 Freibetrag) and a sister (Class II, EUR 20,000 Freibetrag). If he names the sister directly, high tax arises. If he names the daughter as sole Erbin and leaves the sister a legacy of EUR 200,000 in cash: the daughter pays tax only on the net acquisition, the sister pays on EUR 180,000 (EUR 200,000 - EUR 20,000 Freibetrag) = EUR 36,000. The total is significantly less than a direct inheritance.
Comparative calculation: sibling inheritance with strategies
Starting point: childless 65-year-old, wealth EUR 800,000, one sibling as the wished-for Erbe (no children).
| Strategy | Tax burden | Comment |
|---|---|---|
| Direct inheritance without preparation | approx. EUR 234,000 | Brutal hit (EUR 780,000 x 30 % Class II, § 19 Abs. 1 ErbStG; the Haerteausgleich under § 19 Abs. 3 ErbStG does not apply here) |
| Chain of Schenkungen EUR 20,000 every 10 y | approx. EUR 234,000 | Marginal, Freibetraege too small |
| Legacy construction via nephew | approx. EUR 80,000 | If the nephew becomes the main heir |
| Adoption of the nephew | approx. EUR 0 | Family-law-intensive |
| Familienpool between siblings | approx. EUR 234,000 on share transfer | Structure, no tax saving |
| Familienstiftung | approx. EUR 100,000 + Erbersatzsteuer every 30 y | Worth considering from EUR 2 m wealth |
For smaller estates, adoption is by far the most effective strategy — when family-law realistic.
Frequently asked questions
Why do siblings pay such high Erbschaftsteuer?
Because they were downgraded from Steuerklasse I to Class II in 2009. Freibetrag EUR 20,000 instead of EUR 100,000 (parents on inheritance) or EUR 400,000 (children). Tax rates from 15 instead of 7 percent. The political justification: siblings no longer count as "closest family".
How high is the allowance for siblings?
EUR 20,000 (§ 16 Abs. 1 Nr. 5 ErbStG). Per Erblasser relationship, every 10 years afresh. The same Freibetrag applies to nieces and nephews.
Are there tax exemptions for siblings?
Yes, but only very limited. Household goods up to EUR 12,000 tax-free (Class II/III). The family-home exemption does NOT apply to siblings — only to spouses and children.
Is adoption of nieces and nephews worth it?
From a tax point of view yes, often six-figure savings. Family-law-intensive (notary, moral justification, effects on biological parents). For large wealth often economically sensible, but should be advised carefully.
What about life partners (unmarried)?
Life partners without marriage fall into Class III with a EUR 20,000 Freibetrag and 30 percent tax from the first euro over the Freibetrag. Tax-wise the worst-placed. Registered civil partnerships are treated equally to spouses (Class I, EUR 500,000 Freibetrag).
How does the Familienpool work for siblings?
Two or more siblings bring their wealth into a joint GmbH & Co. KG. Each holds shares corresponding to their contribution. On the death of a shareholder the shares pass to the heirs — Erbschaftsteuer arises only on the share inherited, not on the entire pool's wealth.
Are Schenkungen between siblings also expensive?
Yes, under the same rules as inheritance. Class II, EUR 20,000 Freibetrag every 10 years. Chains of Schenkungen rarely pay off between siblings — the Freibetraege are too small.
What about half-siblings?
Half-siblings are treated for tax purposes like full siblings (Class II, EUR 20,000 Freibetrag). Under inheritance law they are however disadvantaged: they inherit only from one parent line, full siblings from both.
Further detail answers
- Erbschaftsteuer 2026: allowances, tax rates, guide — Main guide
- Erbschaftsteuer Freibetraege — table 2026
- Erbschaftsteuer for children
- Erbschaftsteuer real estate and house
- Calculate Erbschaftsteuer — formula and calculator
- Community of heirs among siblings
- Set up a Familienpool as a GmbH & Co. KG
- Topic hub Erbschaftsteuer
Lead magnet: structure the sibling inheritance
- Erbschaftsteuer calculator — Calculate the tax burden for siblings.
- Succession checklist — Strategies for childless Erblasser.
- Arrange a first meeting — Individual sibling strategy.
Authority sources
- § 15 ErbStG (tax classes)
- § 16 ErbStG (allowances)
- § 19 ErbStG (tax rates)
- § 13 ErbStG (exemptions)
- § 14 ErbStG (10-year rule)
- §§ 1767 ff. BGB (adult adoption)
- BFH judgment of 27.11.2019 — II R 1/16 (tax-class classification)
- BVerfG decision of 21.07.2010 — 1 BvR 611/07 (constitutionality of Class II)
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