What is the tax-free allowance for gift tax?
February 28, 2023 | 50,00 EUR | answered by Eiko Hoffmann
Dear tax advisor,
My name is Maria Strauss and I have a question regarding gift tax. My grandfather wants to gift me a property worth 300,000 euros. Now I am concerned about the gift tax and wonder what the exemption amount is in my case.
I have heard that there is an exemption amount up to which gifts are tax-free. Can I use this exemption amount to receive the property without paying taxes? Or do I have to pay taxes on the full value of the property?
I am not sure if I can afford the money for the gift tax if it is due. Are there any ways to avoid or at least minimize the gift tax? I do not want to incur unexpectedly high costs and am therefore looking for a solution that is financially feasible for me.
I would greatly appreciate it if you could assist me and provide information on the exemption amount for gift tax. Thank you in advance for your help.
Sincerely,
Maria Strauss
Dear Mrs. Strauss,
Thank you for your inquiry regarding gift tax. I understand that you are concerned about the possible tax implications related to the planned gift of the property. I would be happy to help you clarify the regulations regarding gift tax and the tax exemption.
First of all, I would like to inform you that gifts are subject to taxation in Germany. This means that for the transfer of assets, such as the property in your case, gift tax may be applicable. The tax exemption, up to which gifts are tax-free, is usually 400,000 euros for children and grandchildren. This exemption can be claimed again every 10 years. Since your grandfather wants to gift you a property worth 300,000 euros, the value is below the exemption limit, so you can receive the property tax-free.
In your case, you do not have to pay gift tax, as the value of the gift is below the exemption limit. You can therefore receive the property without any additional tax burden. However, it is important that the gift is properly documented to avoid any potential tax consequences.
If you still have concerns about being able to pay the gift tax, there are ways to minimize or avoid the tax burden. One option could be, for example, for your grandfather to transfer the property to you in installments instead of all at once. This way, you could fully utilize the exemption limit each time and spread the tax burden over several years.
It is advisable to seek advice from a professional in such cases to find the best solution for your individual situation. I am also available for a personal consultation to further clarify your questions and assist you in structuring the gift.
I hope that this information was helpful to you and I am available to answer any further questions you may have.
Sincerely,
Eiko Hoffmann
