Are there deadlines that must be observed for gifts?
September 30, 2022 | 50,00 EUR | answered by Lina Walter
Dear tax advisor,
My name is Simon Weber and I am currently dealing with the topic of gift tax. I am planning to give a larger sum of money to my son in the near future to help him finance his studies. However, I am unsure if there are specific deadlines that need to be observed for gifts.
Currently, the funds are still in my account, and I want to make sure that I take into account all tax aspects correctly. I am concerned that I might make mistakes in the gift process and could incur unnecessary tax burdens.
Could you please explain to me precisely if there are specific deadlines for gifts that I need to adhere to? And if so, what consequences could arise if I do not meet these deadlines? Are there possibly ways to bypass or extend these deadlines?
I thank you in advance for your support and look forward to your professional advice.
Sincerely,
Simon Weber
Dear Mr. Weber,
Thank you for your inquiry regarding gift tax. I can understand that you are thinking about how to transfer the sum of money to your son in a tax-optimized way. I would be happy to explain to you the most important deadlines that must be observed for gifts, and provide you with some tips on how to minimize tax burdens.
First of all, it is important to know that gifts are generally subject to tax. Gift tax is levied when assets are transferred without consideration. The amount of tax depends on the value of the gift and the relationship between the donor and the recipient.
In Germany, there are tax-free allowances for gifts. For parents and their children, the current tax-free allowance is 400,000 euros every 10 years. This means that you can gift your son money up to this amount tax-free. If the amount exceeds this, gift tax will be due.
Now, regarding the deadlines: There are no fixed deadlines within which gifts must be made. You can give your son the sum of money at any time. However, it is important to know that gift tax is recalculated every 10 years due to the tax-free allowance. This means that you can gift your son the tax-free allowance only once within a 10-year period.
If you exceed the 10-year deadline, you may face a higher tax burden as the tax-free allowance applies again. However, there are ways to bypass or extend this deadline. One possibility is to spread the gift over several years to optimize the tax-free allowance.
It is important to seek timely advice from a tax advisor for larger gifts to avoid tax pitfalls. I am available for a personal consultation to discuss your individual situation and find the best solution together.
I hope that this information has been helpful to you. If you have any further questions, please do not hesitate to contact me.
Best regards,
Lina Walter
