Inherited illegal earnings - What must be done?
In the event of bereavement, the next of kin do not generally immediately consider that inheritance also entails consequences pertaining to tax law. Nonetheless, heirs are obliged to submit an inheritance tax declaration to the competent tax office.
Inheritance becomes a delicate matter where the deceased’s estate includes illegal earnings. To this end, this information must also be promptly provided to the competent tax office. Extreme care should be exercised in the process so that the heirs do not render themselves liable to prosecution on account of tax evasion. If the necessary information concerning the inherited illegal earnings is not submitted to the tax office, the law speaks of tax evasion by omission. The heir must subsequently submit or correct the concealed information pertaining to the testator “without culpable delay”. Heirs who wait too long render themselves liable to prosecution.
If the necessary information is submitted to the tax authorities, tax arrears payments may follow. This generally affects income tax first and foremost.
For heirs who have until now omitted to inform the authorities of illegal earnings in the estate, there is the possibility of filing a voluntary declaration to avoid punishment. In drawing up a voluntary declaration, it is important to observe a whole series of formalities. Above all, it must be completed fully and in good time. For a layman this is hardly feasible and even pre-prepared standard forms are not much use. In order for a voluntary declaration to be able to actually take effect, it is essential to obtain the advice of experienced lawyers and tax advisors.
We are at your disposal as a point of contact for all questions regarding an inheritance.