In certain cases, can I receive my capital gains tax-free?
July 28, 2024 | 40,00 EUR | answered by Anna Karpinski
Dear tax advisor,
In recent years, I have generated some capital gains and I am unsure how to treat them for tax purposes. So far, I have always taxed these gains, but now I am wondering if it is possible in certain cases to receive capital gains tax-free.
My current situation is as follows: I have a portfolio of various securities and investments from which I regularly generate income. These earnings are deposited into my account and taxed accordingly. However, I would like to optimize my tax burden and am interested in whether there are ways to receive capital gains tax-free under certain conditions.
My concerns are that I have not yet utilized all tax optimization opportunities and may be paying unnecessarily high taxes. Additionally, I am unsure if, in my current situation, I even have the possibility to receive capital gains tax-free and what conditions need to be met for this.
Therefore, my question to you is: Are there situations in which it is possible to receive capital gains tax-free? If so, under what conditions is this possible and how can I take advantage of these tax benefits?
I would greatly appreciate it if you could help me with this and provide possible solutions. Thank you in advance.
Sincerely,
Lilli Waldner
Dear Mrs. Waldner,
Thank you for your inquiry regarding the tax treatment of capital gains. I am pleased that you are interested in optimizing your tax burden and seeking ways to receive capital gains tax-free under certain conditions.
In Germany, capital gains must generally be taxed, regardless of whether they are interest, dividends, or capital gains. The tax is levied in the form of flat-rate withholding tax, which is currently at 25%. In addition, there is the solidarity surcharge and, where applicable, church tax. These taxes are withheld by the banks and paid to the tax office.
However, there are certain ways to receive capital gains tax-free or at least more tax-efficiently. One option is to use the saver's lump sum allowance. Currently, this amounts to 801 euros for singles or 1,602 euros for married couples and can be used for capital gains. If your capital gains are below this amount, you do not have to pay taxes on them.
Furthermore, there is the option to receive capital gains tax-free through a tax exemption order. You can provide a tax exemption order to your bank or broker in the amount of the saver's lump sum allowance. The bank will then not withhold taxes on your capital gains as long as they do not exceed the tax exemption order.
Additionally, there are other tax planning opportunities to more tax-efficiently manage capital gains, such as utilizing loss offsetting options or using tax-optimized investment strategies.
Overall, it is indeed possible to receive capital gains tax-free under certain conditions or at least more tax-efficiently. I recommend that you consult with a tax advisor to analyze your individual situation and develop tax-optimized solutions.
I hope this information is helpful to you and I am available for further questions.
Best regards,
Anna Karpinski
