Are there tax differences in gifts of cash and assets?
November 5, 2022 | 50,00 EUR | answered by Bernd Schreiber
Dear tax advisor,
I recently received a gift from my grandfather, which was a larger amount of money. Now I am wondering if there are any tax differences between gifts of cash compared to gifts of assets. I am concerned about whether I may have to pay taxes on the gift and how high they could be. Are there specific tax-free amounts that I need to consider? What are the tax rates for gifts of cash and assets? How can I ensure that I fulfill my tax obligations correctly and avoid any unpleasant surprises?
Thank you in advance for your help and support in this matter.
Sincerely,
Phillip Böhm
Dear Mr. Böhm,
Thank you for your question regarding gift tax. It is understandable that you are concerned about whether and to what extent you will have to pay taxes on the gift from your grandfather. I would be happy to explain the tax differences between gifts of cash and assets to you.
First and foremost, it is important to know that gifts are generally subject to tax. It doesn't matter whether it is cash or assets. However, there are certain tax-free allowances that must be considered when making gifts. Currently, the tax-free allowance for gifts from parents, grandparents, or great-grandparents to their children, grandchildren, or great-grandchildren is 400,000 euros every 10 years. For gifts to other individuals, the tax-free allowance is 20,000 euros every 10 years.
If the value of the gift exceeds the tax-free allowance, gift tax will be due. The tax rates depend on the relationship between the donor and the recipient, as well as the amount of the gift. The tax rates can range from 7% to 30%, depending on the amount of the gift and the relationship between the parties.
To ensure that you fulfill your tax obligations correctly, I recommend that you consult a tax advisor. A tax advisor can help you minimize your tax burden and make potential tax optimizations. Additionally, they can assist you in preparing and submitting the gift tax declaration to avoid any unpleasant surprises.
I hope this information has been helpful to you. If you have any further questions or need assistance, please don't hesitate to contact me.
Best regards,
Bernd Schreiber
Tax Advisor
