In Austria certain dividend and interest income is subject only to a 25 % withholding tax. Besides the 25 % withholding tax no other taxes are due. Hence, that income is excluded not only from taxpayers gross income for income tax, moreover the connected property is exempt from Austrian inheritance tax as well. The article shows that not only Austrian but also German taxpayers can benefit very easily from the exclusion for inheritance tax. That is a consequence of the German-Austrian DTT with respect to taxes on inheritances. Two major characteristics make that treaty so interesting for tax planning: (1) The treaty uses the exemption with progression method, and (2) the tax basis is allocated based only on the residence of the deceased person. It is not important where the heir is resident.