Money gift from abroad
October 29, 2010 | 50,00 EUR | answered by Michael Herrmann
Hello!
I have a question about gift tax.
I am a native Scottish living in Germany, and my father, also Scottish, wants to give me a monetary gift. The money itself comes from the sale of his vacation home in France, where the money is currently in his bank account.
My understanding is that I can receive a gift of up to approximately 200,000 euros from my father without having to pay gift tax, even if the money comes from abroad.
I also understand that I still have to fill out a gift tax return after receiving the money, even if no taxes are due to be paid?
Can you confirm this? If not, how much tax would need to be paid?
Thank you!
Dear inquirer,
First of all, thank you very much for your inquiry, which I would be happy to answer based on the information provided and in the context of your initial consultation. The response is based on the facts presented. Missing or incorrect information regarding the actual circumstances can have an impact on the legal outcome.
According to § 1 para. 1 no. 2 ErbStG, a gift constitutes a taxable event.
Unlimited tax liability exists according to § 2 para. 1 no. 1 sentence 1 ErbStG (Inheritance Tax Act) if a resident is involved in the taxable event. This is the case if
the testator at the time of death, the donor at the time of the gift, and/or the recipient at the time of the tax liability are residents.
Since you are a resident recipient, a taxable acquisition is therefore present. It is irrelevant whether the gifted assets come from abroad or where they were acquired.
As this is a monetary gift, the fair value also represents the taxable value of the acquisition.
As a son, you are the recipient in tax class I no. 2 and have a total tax-free allowance of €400,000 for acquisitions within 10 years. Only when the gifts from the last 10 years exceed this amount will a taxable acquisition be subject to gift tax.
The debtor of ErbSt is the acquirer (heir/legatee/gift recipient) according to § 20 para. 1 ErbStG. In addition to the acquirer, the donor is also liable for gift tax in the case of gifts among the living.
Various reporting obligations have been legally established to secure taxation. The acquirer always has an obligation to report the acquisition transaction, and in the case of gifts among the living, the donor also has this obligation (§ 30 ErbStG). This obligation is largely overlapped by reporting obligations of other groups of people (courts and notaries/banks and insurance companies, etc.). If the gift was notarized in Germany, the notary is already required to report it to the tax office.
In principle, every taxable acquisition is subject to reporting obligations (§ 30 para. 1 ErbStG), regardless of whether it is actually taxable. In the case of gifts, the donor also has to report. If there is a reporting obligation, the acquisition must be informally reported to the competent tax office within three months of becoming aware of it (§ 30 para. 1 ErbStG).
The report should include: name, address of the donor and recipient, date of the gift, object and value of the acquisition, legal basis, relationship, previous acquisitions (§ 30 para. 4 ErbStG).
Even though the above reporting obligations apply to the recipient, the law does not require a general obligation to directly submit a tax return in this context. Rather, a specific request from the tax office is always necessary to submit a tax return, § 31 ErbStG.
I hope these details have provided you with a sufficient overview of the situation in the context of your consultation and remain
Yours sincerely,
Michael Herrmann
Dipl.-Finanzwirt (FH)
Tax advisor
