What tax exemptions apply to capital assets?
October 7, 2022 | 50,00 EUR | answered by Anna Karpinski
Dear tax advisor,
my name is Nina Dietrich and I am currently dealing with the topic of capital assets and the associated tax aspects. I have invested a significant amount of capital and generate regular income from it. However, I am unsure about the applicable tax exemptions for capital assets and how to correctly report them in my tax return.
I am currently concerned that I may have to pay taxes that could be avoided if I properly consider the tax exemptions. Therefore, I would like to know from you what exemptions exist for capital assets and under what conditions I can claim them. Are there specific requirements that I must meet in order to benefit from the tax exemptions?
Furthermore, it would be helpful to know if there are ways to minimize my tax burden through smart management of my capital assets. For example, are there tax optimization opportunities that I have not yet considered?
I would greatly appreciate a detailed response that provides clarity and shows me how I can optimize my tax situation in relation to capital assets. Thank you in advance for your support.
Best regards,
Nina Dietrich
Dear Mrs. Dietrich,
Thank you for your inquiry regarding capital assets and the associated tax aspects. I would be happy to help you with your questions and provide clarity on the matter.
Firstly, regarding tax-free allowances for capital assets: In Germany, for the year 2021, there is an annual savings allowance of 801 euros for singles and 1,602 euros for married couples. This allowance applies to all income from capital assets, such as interest, dividends, or capital gains. If your income from capital assets is below this amount, you do not have to pay taxes on it and do not have to fill out the KAP form in your tax return.
To claim the savings allowance, you do not need to meet any specific requirements. It is sufficient that you own capital investments from which you generate income. If your capital income exceeds the savings allowance, you must declare it in your tax return and pay taxes on it.
There are various ways to optimize your tax burden through strategic management of your capital assets. One option is to use tax-optimized investment forms, such as tax-efficient investment funds or strategically using exemption orders at banks to offset interest and dividends for tax purposes. Additionally, a long-term investment strategy can help save taxes, as capital gains are tax-free if held for more than a year.
It is advisable to consult a tax advisor or financial expert to analyze your individual tax situation and identify optimization opportunities. Professional advice can help you minimize your tax burden and efficiently manage your capital assets.
I hope my response has been helpful, and I am available for further questions. Thank you for your interest and inquiry.
Best regards,
Anna Karpinski
