Inheriting from a German estate means German inheritance tax (Erbschaftsteuer) is charged on each beneficiary, softened by generous personal allowances — €400,000 for a child, €500,000 for a spouse. The estate is settled under German succession law, and the euro proceeds are then converted into sterling, usually through a specialist currency broker rather than a bank.
Who this guide is for
This guide is for UK residents inheriting money, property or investments in Germany — typically British-German families and the families of British expatriates who lived and worked there. It covers how a German estate is settled, the inheritance tax and its allowances, the UK position, and how to protect the sterling value of the inheritance as it moves.
Germany is a major destination for British professionals and a common inheritance corridor into the UK. Its inheritance tax is charged on the beneficiary but comes with sizeable tax-free allowances for close family. For the wider position across the bloc, see our guide to receiving an EU inheritance as a UK resident; this page covers the Germany-specific detail.
How does inheriting from a German estate work?
Germany does not use an English-style grant of probate. Where proof of entitlement is needed — for example to deal with a bank or to re-register property — the heirs obtain a certificate of inheritance (Erbschein) from the probate court (Nachlassgericht), which confirms who inherits and in what shares.
Heirs are also generally required to notify the German tax office of the inheritance shortly after the death — broadly within three months — after which a return may be requested. Where the deceased held assets in both Germany and the UK, the two estates are typically administered separately.
How much German inheritance tax will you pay?
German inheritance tax is charged on each beneficiary, and both the tax-free allowance and the rate depend on the relationship to the deceased. Each beneficiary deducts a personal allowance (Freibetrag) before tax is calculated.
| Beneficiary | Tax-free allowance |
|---|---|
| Spouse or registered partner | €500,000 |
| Child (or stepchild) | €400,000 |
| Grandchild | €200,000 |
| Parent or grandparent | €100,000 |
| Everyone else | €20,000 |
Above the allowance, tax is charged on a progressive scale that depends on the beneficiary’s tax class. Close family in Class I (spouse, children, grandchildren) pay between 7% and 30%; siblings, nieces and nephews in Class II pay 15% to 43%; and unrelated beneficiaries in Class III pay 30% to 50%. Because of the large allowances, a typical parent-to-child inheritance below €400,000 often pays no German inheritance tax.
Whether you are taxed at all depends on residence and the type of asset. German inheritance tax applies to the worldwide estate where the deceased or the heir is resident in Germany, and to German-situated assets — such as German real estate — even where neither is resident. A German tax professional should confirm the scope in your case.
Forced heirship and Brussels IV
German law protects close family through a compulsory portion (Pflichtteil). Children, a spouse and sometimes parents are entitled to a minimum claim — broadly half the value of their statutory share — which takes the form of a monetary claim against the estate rather than a share of specific assets.
Under Article 22 of the EU Succession Regulation (Regulation 650/2012, known as Brussels IV), a person can elect in their will for the law of their nationality to govern their whole succession. A British national can therefore choose the law of England and Wales, which has no forced heirship, to apply to their German estate. Because Germany applies the regulation regardless of nationality, this election is still available to UK nationals after Brexit, and whether it was made is a question for a cross-border solicitor.
Do you pay UK tax on a German inheritance?
The UK does not tax you simply for receiving an inheritance from Germany, and there is no UK tax on moving the money into a UK account. UK inheritance tax can apply to the deceased’s estate, and since 6 April 2025 it turns on long-term UK residence rather than domicile, according to GOV.UK. Someone UK-resident for fewer than 10 of the previous 20 years is broadly outside the scope on non-UK assets.
Where both German and UK inheritance tax apply to the same assets, UK unilateral relief can give credit for the German tax paid, so the same value is not taxed twice over. The interaction is intricate, so our guide to UK inheritance tax for expats explains the 2025 reform, and tax on money transferred to the UK from overseas covers the receiving side. This is general information, not tax guidance — confirm your position with a qualified adviser in both countries.
Ways to move a German inheritance to the UK compared
Once the German estate is settled and the euros are yours, the money still has to become sterling. Where the allowances mean little or no German tax, the currency conversion is often the single biggest cost in the whole process.
| Method | Typical exchange-rate margin | Forward contracts? | Best suited to |
|---|---|---|---|
| High-street bank | Around 3%–4% built into the rate | Rarely for private clients | Small, one-off amounts where convenience wins |
| Money-transfer app | Often under 1%, but limits and tiered pricing apply on large sums | No | Modest transfers within app limits |
| Specialist currency broker | Typically 0.2%–1%, tighter on larger sums | Yes — up to around 12 months ahead | Large inheritances with uncertain timing |
The margin is charged on the whole sum, so on a six-figure inheritance the gap between a bank rate and a broker rate is frequently measured in thousands of pounds. Our comparison of a currency broker versus a bank sets out the trade-offs, and who gives the best exchange rates on large transfers looks specifically at high-value sums.
What is the currency risk on a euro inheritance?
GBP/EUR moves constantly, driven largely by the interest-rate and growth differential between the Bank of England and the European Central Bank. For someone converting euros into pounds, a stronger euro means more sterling and a weaker euro means less. Neither direction can be predicted with confidence, which is exactly the problem when a large sum is involved.
The scale is easy to underestimate. A 2% swing in the exchange rate on a €400,000 inheritance is €8,000 — and rates can move by more than that over the months a German estate takes to settle. Because obtaining the Erbschein and settling the tax commonly run to several months, the rate at the moment you finally convert is rarely the rate you saw when the process began. To follow the live number when you are ready, see converting a large amount of euros to pounds.
Worked example: converting a €400,000 inheritance
Suppose you inherit €400,000 from a German estate and expect to repatriate it once the estate and any tax are settled. Using illustrative round rates:
- At an illustrative 1.14 euros to the pound, €400,000 converts to about £350,900.
- At 1.17, the same euros convert to about £341,900 — roughly £9,000 less.
- The only variable that changed is the exchange rate. The inheritance is identical.
A forward contract lets you fix a rate now for a conversion you settle later, turning that unknown sterling outcome into a known one. This is not a prediction that the rate will move in any particular direction — it removes the uncertainty entirely while the German paperwork is completed.
How can you protect the exchange rate?
- Spot transfer: convert at the live rate once the euros are cleared and yours to move.
- Forward contract: fix today’s rate for a conversion up to around 12 months ahead, usually for a modest deposit — see how a forward contract works.
- Market order: set a target rate and convert automatically if the market reaches it.
Forward contracts suit an inheritance because the timing is set by the probate court and the tax office, not by the market. Fixing the rate early stops a favourable position slipping away while the estate is wound up.
What mistakes do beneficiaries make?
- Missing the notification requirement: heirs are generally expected to notify the German tax office of the inheritance within about three months.
- Overlooking the tax classes: a sibling or unrelated beneficiary has only a €20,000 allowance and much higher rates than a child or spouse.
- Converting through a bank: a 3%–4% margin buried in the rate can quietly cost thousands on a six-figure inheritance.
- Being unprepared for UK checks: a large incoming transfer triggers source-of-funds questions — see proof of funds on large international transfers and the documents you may be asked for.
Why does a specialist broker matter for a German inheritance?
Where the allowances mean little German tax, the exchange rate is frequently the one large cost you can actively manage. A specialist holds a tighter margin than a bank, offers forward contracts and market orders that banks rarely extend to private clients, and can time the conversion around the estate’s release of funds.
Cambridge Currencies operates through FCA-authorised partners, including Currencycloud (an authorised electronic money institution, FCA reference 900199) and ScioPay, so funds are handled within a regulated framework. For the corridor mechanics, see our guide to a money transfer from Germany to the UK, and for the wider picture, receiving an inheritance from abroad.
Frequently asked questions
How much is inheritance tax in Germany?
It depends on the relationship. After a personal allowance — €500,000 for a spouse, €400,000 for a child — tax runs from 7% to 30% for close family (Class I), 15% to 43% for siblings and nieces or nephews (Class II), and 30% to 50% for others (Class III).
Do children pay German inheritance tax?
Only above their allowance. Each child has a €400,000 tax-free allowance per parent, so a typical inheritance below that pays no German inheritance tax. Above it, Class I rates from 7% apply.
Can a British national avoid German forced heirship?
Under Brussels IV, a British national can elect for the law of England and Wales to govern their estate, which has no forced heirship. Because Germany applies the regulation regardless of nationality, this remains available after Brexit. Take cross-border legal advice.
Do I pay UK tax on money inherited from Germany?
You are not taxed simply for receiving the inheritance or transferring it into a UK account. UK inheritance tax applies to the deceased’s estate and, since 6 April 2025, depends on long-term UK residence. Where both countries tax the same assets, UK unilateral relief can credit the German tax paid. Confirm your position with a qualified adviser.
Can I fix the GBP/EUR rate before the German estate is settled?
Yes. A forward contract can fix a rate for a conversion up to around 12 months ahead, usually for a modest deposit. This suits German inheritances, where the probate court and tax office make the timing uncertain.
Speak to a specialist about your German inheritance
Bringing an inheritance home from Germany? A Cambridge Currencies specialist can talk you through the current GBP/EUR rate, how to time the conversion around the estate settlement, and whether a forward contract fits your timeline — every transfer completed by phone with a dedicated broker. Get in touch for a quote to get started.
Related guides
- Receiving an EU inheritance as a UK resident
- Transferring an inheritance from abroad to the UK
- Inheritance from the USA to the UK
Cambridge Currencies provides currency guidance and execution, not tax, legal or financial advisory services. German and UK inheritance rules are complex and subject to change; confirm your position with a qualified adviser in both countries. Services are delivered through FCA-authorised partners, including Currencycloud and ScioPay. Any exchange rates shown are illustrative and used only to explain the mechanics.
