How does a gift affect my inheritance?
April 15, 2023 | 60,00 EUR | answered by Lina Walter
Dear tax advisor,
My name is Marcus Waldmüller and I am facing an important decision regarding a gift. My father is planning to transfer a part of his wealth to me to support me financially. However, I am concerned about how this gift will affect my inheritance.
Currently, I am in a complex situation. My father has a substantial amount of wealth that he wishes to distribute among his children. Being his only child, I am the main heir and would therefore inherit a large portion of his wealth. However, he wants to gift me a part of it during his lifetime to support me early on.
My concerns revolve around not knowing exactly how this gift will impact my future inheritance. Will the gifts be deducted from the inheritance? Will I have to pay gift tax? And what are the tax implications of a gift in general?
I would like to gain more clarity on the tax aspects of a gift and find out if it is wise to accept the gift or if there are better alternatives to protect my inheritance. Your expertise as a tax advisor would be very helpful in making the best possible decision.
Thank you in advance for your support.
Best regards,
Marcus Waldmüller
Dear Mr. Waldmüller,
Thank you for your inquiry regarding a gift and its tax implications on your future inheritance. It is understandable that you are concerned about how this financial support from your father will affect your tax situation and your inheritance. I would like to provide you with more clarity on gift tax and help you make the best decision possible.
First of all, I must inform you that gifts are generally subject to tax. Gift tax is paid by the recipient and is based on the value of the gift as well as the relationship between the donor and the recipient. In your case, as the son of your father, the gift would fall into tax class I, which means that no gift tax is due up to a tax-free allowance of 400,000 euros. If the value of the gift exceeds this allowance, the excess amount is taxed at a rate between 7% and 30%.
Now to the question of whether gifts are offset against the future inheritance: Generally, gifts made within 10 years before the donor's death are offset against the inheritance. This means that the value of the gift is deducted from your future share of the inheritance. This may result in you inheriting less in the end than if no gift had been made. It is important to consider this in your decision-making process.
However, there are ways to optimize gifts for tax purposes in order to minimize the tax implications. An experienced tax advisor like myself can help you find the best solution. For example, there are allowances that can be used every 10 years to make tax-free gifts.
In conclusion, it is important to inform yourself early on about the tax aspects of gifts and inheritances to avoid unpleasant surprises. I am available for a detailed consultation to find the best solution for your situation.
I hope this information is helpful and I am happy to answer any further questions you may have.
Best regards,
Lina Walter, Tax Advisor.
