Do material gifts need to be declared for gift tax?
December 31, 2022 | 50,00 EUR | answered by Lina Walter
Dear tax advisor,
My name is Sebastian Buchner and I have a question regarding gift tax. My grandfather recently gifted me a valuable painting that has been passed down through generations in our family. Now I am wondering if I need to declare this in the gift tax.
My grandfather acquired the painting many years ago and it holds a high sentimental value for me and our family. I have researched and learned that gifts above a certain exemption amount are subject to tax. Since the painting is a tangible gift, I am unsure if its value needs to be considered in the gift tax.
I am concerned that I may have to pay taxes if I do not declare the painting correctly. At the same time, I do not want to pay unnecessary taxes if it is not required.
Could you please explain to me if tangible gifts need to be declared in the gift tax and how I should proceed in my case? Are there ways to estimate the value of the painting or are there specific exceptions to consider?
Thank you in advance for your assistance.
Sincerely,
Sebastian Buchner
Dear Mr. Buchner,
Thank you for your inquiry regarding the gift tax in relation to the valuable painting that your grandfather has gifted to you. It is understandable that you are concerned about whether you need to declare the non-cash gift for gift tax purposes and how to proceed in this case.
In general, gifts above a certain exemption amount are subject to tax in Germany. The exemption amount primarily depends on the relationship between the donor and the recipient. For gifts between grandparents and grandchildren, the current exemption amount is 200,000 euros every 10 years. Since the painting is a gift from your grandfather, the exemption amount would be relevant in your case.
Non-cash gifts such as paintings are valued for gift tax purposes based on their market value. This value can consist of both the material value and the sentimental value of the object. It is therefore advisable to have the painting appraised by an expert to ensure a correct declaration in your gift tax return.
It is important to note that there are exceptions and special rules for gift tax. For example, certain items such as family jewelry or household goods may be exempt from gift tax under certain circumstances. Additionally, support payments or gifts for the education or initial setup of children may be tax-free.
To ensure that you handle the gift tax correctly, I recommend consulting a tax advisor. An expert can help you determine the market value of the painting, prepare the gift tax return, and consider any other tax aspects that may apply.
I hope this information is helpful to you and I am available to answer any further questions you may have.
Best regards,
Lina Walter, Tax Advisor
