How can I optimally plan donations to my grandchildren for tax purposes?
January 13, 2024 | 50,00 EUR | answered by Bernd Schreiber
Dear tax consultant,
My name is Gertrud Wagner and I am faced with the question of how to optimally plan gifts to my grandchildren from a tax perspective. I would like to provide financial assistance to my grandchildren to enable them to have a good future. However, I am concerned that high gift taxes could be incurred and would like to avoid this.
Currently, I own assets in the form of real estate, securities, and cash, which I would like to partially pass on to my grandchildren. It is important to me that the gifts are handled as tax-efficiently as possible and that my grandchildren pay as little tax as possible.
What options are available to optimally plan gifts to my grandchildren from a tax perspective? Are there specific tax-free allowances or planning options that I can utilize to reduce the tax burden? What legal and tax aspects do I need to consider to ensure that the gifts are tax-efficiently structured?
I look forward to your expert advice and thank you in advance for your support.
Sincerely,
Gertrud Wagner
Dear Mrs. Wagner,
Thank you for your inquiry regarding the optimal tax planning of gifts to your grandchildren. It is commendable that you wish to provide financial support to your grandchildren to enable them to have a good future. I am happy to provide you with some information and tips on how to make gifts in a tax-efficient manner.
First and foremost, it is important to know that there are tax-free allowances for gifts to grandchildren. Currently, the tax-free allowance for grandchildren is 200,000 euros every 10 years. This means that you can gift your grandchildren up to this amount every 10 years without incurring any tax. If the value of the gift exceeds this allowance, gift tax will be due, which your grandchildren will have to pay.
To reduce the tax burden, you can spread the gifts over a longer period of time to make optimal use of the tax-free allowance. For example, you could transfer a portion of your assets to your grandchildren every few years to minimize the gift tax. Additionally, you could also consider tax-efficient gift strategies such as usufruct reservations or division arrangements to reduce the tax burden.
However, it is important to seek comprehensive advice beforehand to clarify any potential tax consequences. A tax advisor can help you develop the optimal gift strategy for your individual situation and consider all legal and tax aspects.
In summary, there are indeed ways to plan gifts to your grandchildren in a tax-efficient manner. Take advantage of the tax-free allowances and seek advice from a tax advisor to minimize the tax burden and provide financial support to your grandchildren.
I hope that this information has been helpful to you and I am available to answer any further questions you may have.
Best regards,
Bernd Schreiber
