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German Inheritance and Gift Tax on Bitcoin and Other Crypto Assets
Crypto assets are subject to inheritance and gift tax like any other wealth. Particularities arise in valuation, in evidence and from volatility – all of which can be mitigated by forward-looking structuring.
Last updated: 11 July 2026 · Prof. Dr. Frank Martin, notary in Limburg an der Lahn, Germany
Tax liability and valuation
Acquisition of crypto assets on death is subject to inheritance tax (sec. 1 (1) no. 1 ErbStG), lifetime gifts to gift tax (sec. 1 (1) no. 2 ErbStG). The taxable base is fair market value (sec. 12 ErbStG, sec. 9 BewG): for liquid crypto assets, the price on a recognised trading platform – on death as of the date of death (sec. 11 ErbStG), for gifts at execution of the gift.
Volatility makes the reference date decisive: prices can move substantially between the date of death and actual availability of the assets. If the price falls after the reference date, tax remains due on the higher value. This argues for securing holdings quickly in an inheritance case and for planning liquidity early – the tax is payable in euros.
Allowances and tax brackets
- Spouses and registered partners: EUR 500,000 (class I)
- Children: EUR 400,000 per parent (class I)
- Grandchildren: EUR 200,000 (class I)
- Parents and grandparents on acquisition on death: EUR 100,000 (class I)
- Siblings, nieces/nephews, children-in-law: EUR 20,000 (class II)
- All other acquirers: EUR 20,000 (class III)
Rates range from 7 to 50 percent depending on class and value. Allowances renew every ten years for lifetime gifts (sec. 14 ErbStG) – the most important optimisation lever; see Gifting Bitcoin.
Notification duties and evidence
Acquirers must notify the tax office within three months (sec. 30 ErbStG). For notarised gifts the notary files the report (sec. 34 ErbStG) and the parties' own duty lapses (sec. 30 (3) ErbStG). Assessment requires robust evidence: inventory, wallet addresses (without disclosing keys), price documentation for the reference date and provenance records. A notarial structure that documents holdings and valuation mechanics saves heirs considerable effort later.
Do not forget income tax
A later sale may additionally trigger income tax: gains from disposing of crypto assets within one year of acquisition are taxable private disposal transactions (sec. 23 (1) sent. 1 no. 2 EStG; Federal Fiscal Court, judgment of 14 Feb 2023 – IX R 3/22). Heirs and donees take over their predecessor's acquisition data (sec. 23 (1) sent. 3 EStG). Details are set out in the Federal Ministry of Finance circular of 6 March 2025 on crypto assets.
Interplay of inheritance tax and income tax
With crypto assets two types of tax meet. Acquisition on death triggers inheritance tax (valuation as of the date of death). If the heirs later sell the coins, income tax may additionally arise – under current law only within the one-year holding period, which the heirs "inherit" from the deceased (sec. 23 (1) sent. 3 EStG). Should the planned reform abolish the holding period from 2027, this advantage would fall away for all disposals. The interaction of both taxes should be considered in estate planning and calculated with tax advice. More in the article The end of the holding period from 2027.
Valuation problems for illiquid tokens
While Bitcoin and major cryptocurrencies have daily prices on recognised exchanges, valuing illiquid or exotic tokens is difficult. Where no meaningful market price exists, the fair market value must be estimated – for instance based on recent transactions or recognised valuation methods. For the inheritance-tax return, a comprehensible, documented valuation as of the reference date is advisable to avoid disputes with the tax office.
Deferral of inheritance tax
If the estate is largely tied up in crypto assets and immediate payment would force a distress sale in an unfavourable market phase, a deferral of inheritance tax may be considered in an individual case (sec. 222 AO; for certain cases sec. 28 ErbStG). There is no automatic entitlement; a reasoned application is required. Estate structuring can provide for liquidity through cash legacies or staggered realisation directions.
FAQ on this topic
At fair market value – in practice the price on a recognised trading platform – as of the date of death (sec. 11 ErbStG, sec. 9 BewG). Later price falls do not reduce the tax once it has arisen.
Yes – acquirers must notify the tax office within three months (sec. 30 ErbStG). For notarised gifts, the notary reports (sec. 34 ErbStG) and the parties' own duty lapses.
The inheritance itself does not trigger income tax. But if heirs sell within the deceased's still-running one-year holding period, a taxable private disposal arises (sec. 23 EStG) – the deceased's acquisition data carry over.
The tax is payable in euros. For larger crypto holdings, liquidity planning should be part of the estate plan – partial sales, legacy structures or, in individual cases, deferral arrangements.
Not doubly in the strict sense, but two taxes may be involved: acquisition on death is subject to inheritance tax (valuation as of the date of death). If the heirs later sell at a gain, income tax may additionally arise – under current law only within the one-year period inherited from the deceased. The planned 2027 reform could change this.
Where no meaningful price exists, the fair market value must be estimated – for instance based on recent transactions or recognised valuation methods. A comprehensibly documented valuation as of the reference date is important to avoid disputes with the tax office.
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