Is there an age limit for gift tax-exempt amounts?
November 25, 2022 | 50,00 EUR | answered by Bernd Schreiber
Dear tax consultant,
My name is Jessica Lauer and I have a question regarding gift tax. My grandfather wants to give me a larger amount of money to financially support me. However, I have concerns regarding gift tax and I am unsure if there is an age limit for gifts to be tax-free.
My grandfather is already well over 70 years old and I wonder if there is an age limit for gifts to be tax-free. I am not sure if I, as his granddaughter, can also benefit from this regulation or if there are differences depending on the degree of relationship.
I am worried that my grandfather's gift could be tax disadvantageous for me and therefore want to make sure in advance that I am aware of all possible options to avoid taxes.
Could you please explain to me if there is an age limit for tax-free gifts and if I, as his granddaughter, can benefit from it? Are there possibly other ways to make the gift more tax-friendly?
Thank you in advance for your help.
Sincerely,
Jessica Lauer
Dear Mrs. Lauer,
Thank you for your question regarding gift tax. It is understandable that you are concerned about the tax implications of your grandfather's planned gift. I will therefore explain in detail whether there is an age limit for tax-exempt gift amounts and what options are available to make the gift more tax-efficient.
In Germany, there is a tax-free threshold for gifts, which varies depending on the degree of relationship. The tax-free threshold for grandchildren is currently 20,000 euros. This means that you can receive gifts from your grandfather tax-free up to this amount. For gifts that exceed this threshold, gift tax is applicable. The amount of tax depends on the value of the gift and the degree of relationship between the donor and the recipient.
There is no specific rule regarding an age limit for tax-free gifts. What matters is the degree of relationship and the actual value of the gift. Since your grandfather is already over 70 years old, this does not directly affect gift tax. However, in certain cases, it may be advisable to consider tax aspects related to the age of the donor to optimize the tax treatment of the gift.
To make the gift more tax-efficient, there are various options. One option would be to split the gift over several years to make optimal use of the tax-free thresholds in each year. Additionally, you may consider whether you would like to receive the gift in the form of assets or real estate, as these may be tax-favored under certain circumstances.
However, it is advisable to seek individual advice from a tax advisor in your specific case to determine the best tax structure for the gift. Every case is unique and requires personalized tax planning.
I hope that this information has been helpful, and I am available to answer any further questions you may have. Thank you for your trust and inquiry.
Sincerely,
Bernd Schreiber
