In short
Germany taxes the heir, not the estate, with large allowances for close family: €500,000 for a spouse, €400,000 per child. Crypto is valued at its market price on the day of death. For income tax the heir steps into the deceased’s shoes: if the coins were held for more than a year, they can be sold tax-free. The Finanzamt must be told within three months, and children and spouses can’t be fully disinherited.
Erbschaftsteuer: who pays what
Inheritance tax is charged on what each heir receives, after a personal allowance that depends on the relationship (§16 ErbStG):
| Heir | Allowance | Tax class |
|---|---|---|
| Spouse or registered partner | €500,000 | I |
| Child, stepchild | €400,000 | I |
| Grandchild | €200,000 (€400,000 if the parent has died) | I |
| Parent (on death) | €100,000 | I |
| Sibling, niece, nephew, in-law, ex-spouse | €20,000 | II |
| Anyone else | €20,000 | III |
Above the allowance, class I pays from 7% (up to €75,000) rising to 30% above €26 million; class II from 15% to 43%; class III 30% up to €6 million, then 50% (§19 ErbStG). Gifts from the same person in the previous ten years are added in. A €300,000 bitcoin holding left to one child is therefore tax-free; left to a friend it costs roughly €84,000.
How crypto is valued and taxed
- For inheritance tax crypto is an ordinary asset, valued at its market value (gemeiner Wert) on the day of death, in practice the price on public exchanges. Tax is due even if the heirs can’t open the wallet; only objectively proven, permanent inaccessibility brings the value to zero (Der Betrieb). See When the keys are really lost.
- For income tax the sale of crypto by a private person is a privates Veräußerungsgeschäft: taxable if sold within a year of purchase, tax-free after that; gains under €1,000 a year are ignored, gains of €1,000 or more are taxed in full (§23 EStG). The Finance Ministry restated the rules in its letter of 6 March 2025 (CMS).
- Inheriting isn’t buying. The heir takes over the deceased’s purchase date and price (the Fußstapfentheorie, §23(1) sentence 3 EStG). Coins the deceased had held for over a year can be sold by the heir at once without income tax; coins bought recently keep the deceased’s clock (Deubner). That makes the deceased’s purchase records worth finding: without them the holding period can’t be proven.
Documents: the Erbschein
Banks and exchanges want proof of who the heirs are. The standard document is the Erbschein, issued by the Nachlassgericht of the deceased’s last residence, applied for there or through a notary; the fee depends on the estate (Justiz NRW). A notarial will together with the court’s opening record usually does the same job, and the BGH ruled in 2013 that banks can’t insist on an Erbschein in every case (LTO). Expect weeks; an exchange abroad may still ask for a translation.
Wills, the Pflichtteil and privacy
- Children, spouses and (if there are no children) parents who are left out of a will can claim half their statutory share in money, the Pflichtteil (Bayerische Justiz). A will that leaves all the bitcoin to one child doesn’t stop the others claiming their share of its value.
- Wills aren’t public records. The Zentrales Testamentsregister stores only where a notarial or deposited will is kept, not its content, and informs the court when the registry office reports a death (Bundesnotarkammer). Even so, a will is read by the court, the heirs and their lawyers; seed phrases stay out of it (what to put in a will).
Deadlines
Each heir must notify the Finanzamt in writing within three months of learning of the inheritance, unless it rests on a will opened by a German court or notary that makes the relationship clear, and even then if the estate holds foreign assets, real estate or business assets (§30 ErbStG). Crypto on a foreign exchange counts as foreign. When in doubt, notify.
Digital accounts pass to the heirs
The BGH decided in 2018, in the Facebook case, that a user’s contract with an online service passes to the heirs like letters and diaries do, and that a clause blocking them is invalid (Haufe). That helps with email and exchange accounts; a self-held wallet still needs the keys.
Crypto reporting
Germany’s DAC8 law (Kryptowerte-Steuertransparenzgesetz) has applied since 1 January 2026; exchanges report their customers’ transactions for the first time by 31 July 2027 (Haufe, §9 KStTG). Undeclared holdings are becoming visible.
Checklist for German heirs
- List every account and wallet (Finding crypto) and look for the purchase dates and prices.
- Value each holding at the market price on the day of death and keep the source.
- Notify the Finanzamt within three months.
- Get the Erbschein or the notarial will with opening record; send claims to exchanges with it.
- Check whether the one-year holding period has already run before anyone sells.
Not tax or legal advice. Figures as of October 2026; check the linked sources.