The loss of value on an inherited securities portfolio is not taken into account when calculating inheritance tax.
Price drop
The case concerns two brothers, who inherit a securities portfolio from their aunt who died on 26 February 2020. On 25 February 2020, the value of this portfolio is almost €1,500,000. The brothers immediately instruct the bank to liquidate the portfolio. At the end of June 2020, they receive from the bank the proceeds of the portfolio, approximately €1,250,000.
ECHR
The Inland Revenue includes the portfolio in the inheritance tax assessment for €1,500,000. The brothers believe that they owe inheritance tax on €1,250,000, invoking the European Convention on Human Rights (ECHR). On the difference of €250,000, 40% owes inheritance tax.
The Court found that the Tax Office had determined the assessment in accordance with the applicable legislation. If the inheritance tax qualifies as an individual and excessive burden, it should be omitted under the ERVM. But there is no such burden, according to the court. The tax burden on the total acquisition, of 44.22%, is not a direct reason for it. Nor have the brothers been able to make it plausible that the burden is felt more strongly in their case than generally. What is important here is that it is not uncommon for a securities portfolio to fall in value. The impact of the COVID-19 pandemic on the decline in value does not alter that in this case.