Can I avoid gift tax by giving away my assets?
August 13, 2023 | 60,00 EUR | answered by Fred Wittik
Dear Tax Advisor,
My name is Dora Strauss and I am considering making a gift of my assets. I am aware that gifts are tax relevant and gift tax is applicable. Therefore, I am wondering if it is possible to avoid gift tax by gifting my assets.
My assets mainly consist of cash, real estate, and securities. I would like to pass on a large portion of it to my children to ensure that they are financially secure in the future. However, I am concerned about the tax burden associated with making a gift.
Can you provide me with possible solutions on how to avoid or at least reduce gift tax? Are there legal ways to gift my assets in a tax-efficient manner? I want to ensure that my children can benefit from my assets without incurring high tax payments.
Thank you in advance for your help and advice.
Sincerely,
Dora Strauss
Dear Mrs. Strauss,
Thank you for your inquiry regarding gift tax and possible tax-optimized solutions for transferring your assets to your children. It is understandable that you are concerned about the tax implications of a gift and want to ensure that your children are financially secure without having to pay high taxes.
First and foremost, it is important to know that gifts are generally subject to taxation. Gift tax is applicable when you give assets worth more than the annual tax-free allowance to your children. The allowance depends on the relationship and is currently 400,000 euros per child every 10 years. For grandchildren, the allowance is 200,000 euros.
To avoid or at least reduce gift tax, there are various legal options available. One option would be to utilize the annual tax-free allowances of currently 20,000 euros per child. By making regular smaller gifts, you can transfer your assets gradually without exceeding the allowance, which can help minimize the tax burden.
Furthermore, you can also benefit from tax advantages such as the maintenance allowance or maintenance allowances for children. These allowances are granted when you guarantee your children lifelong support, such as through regular payments or the transfer of a property.
Another way to reduce gift tax is to use tax-optimized structures such as an anticipated inheritance or the establishment of a family company. Through clever asset transfer and structuring, you can minimize the tax burden in the long term.
However, it is important that you seek detailed advice from a tax advisor before making gifts to find the best individual solution for your situation. Each case is unique and requires tailored tax advice.
I hope that I could assist you with this information and I am available for any further questions. Thank you for your trust and inquiry.
Sincerely,
Fred Wittik
