Are there any exceptions to the gift tax obligation?
May 23, 2022 | 65,00 EUR | answered by Fred Wittik
Dear tax advisor,
My name is Erwin Friedendahl and I have a question regarding gift tax. Recently, my parents transferred a larger sum of money to me which I would like to use for purchasing a property. Now I am concerned about gift tax and wondering if there are any exceptions to the gift tax obligation.
My parents are already in retirement age and they transferred the money to me as financial support for buying my own house. I am the only son and my parents would like to support me in having my own home.
I have heard that there are certain tax-free allowances for gifts up to a certain amount. However, I am unsure if these allowances apply in my case, as it is a larger sum of money. Are there any exceptions or special regulations that could apply in my case to avoid or reduce gift tax?
I would greatly appreciate if you could provide me with information on this matter and suggest possible solutions on how I can avoid or reduce gift tax liability. Thank you in advance for your assistance.
Best regards,
Erwin Friedendahl
Dear Mr. Friedendahl,
Thank you for your inquiry regarding gift tax. I am pleased that you are seeking information in a timely manner to consider possible tax implications.
In general, gifts above a certain threshold are subject to gift tax. The amount of this threshold depends on the relationship between the donor and the recipient. For example, the exemption amount for children is 400,000 euros. Since you are the only son of your parents, you can claim this exemption.
In your case, your parents transferred a larger sum of money to support you in purchasing a property. As long as this amount does not exceed the exemption of 400,000 euros, you are exempt from gift tax. However, if the amount exceeds this threshold, gift tax will be due on the excess amount.
There are also certain exceptions and special rules that can be applied under certain circumstances to avoid or reduce gift tax. For example, gifts for the acquisition of owner-occupied property may be tax exempt in some cases. Since your parents transferred the money to you for the purchase of your own home, this exception may be relevant to you.
It is important that you gather all relevant documents and seek advice from an experienced tax advisor to ensure that you are utilizing all options for tax optimization. A good tax advisor can help you minimize gift tax and provide you with possible solutions.
I recommend scheduling a meeting with a tax advisor to discuss your individual situation and develop tailored solutions. I am also available to answer your questions and support you in your matter.
Best regards,
Fred Wittik
