What is the tax rate for gift tax?
October 15, 2023 | 60,00 EUR | answered by Lina Walter
Dear tax advisor,
I have a question regarding gift tax and would like to learn more about it. My name is Otto Ziegler and I am planning to gift a larger sum of money to my son. However, I am unsure about the tax rate for gift tax and whether I have to pay it at all.
Currently, my son is in a financially difficult situation and I would like to help him by giving him a gift. However, I am concerned that I may have to pay high taxes as a result and would like to inform myself beforehand to avoid any unpleasant surprises.
Can you please explain to me what the tax rate for gift tax is and in which cases one has to pay taxes at all? Are there ways to bypass or minimize gift tax? I would be very grateful if you could provide me with more information on this so that I can make an informed decision.
Thank you in advance for your help.
Sincerely,
Otto Ziegler
Dear Mr. Ziegler,
Thank you for your inquiry regarding gift tax. I would like to explain in detail how gift tax works and what factors play a role in it.
Gift tax is a tax that is levied when assets are transferred through a gift. The value of the gift is taxed, with a tax-free allowance up to which no taxes are due. The tax-free allowance depends on the relationship between the donor and the recipient. For example, for children, the tax-free allowance is 400,000 euros.
If the value of the gift exceeds the tax-free allowance, gift tax is due. The tax rate depends on the relationship between the parties and the value of the gift. For children, the tax rate ranges from 7% to 30%, depending on the amount of the gift. It is therefore possible that you may have to pay taxes if you give your son a large sum of money.
However, there are ways to avoid or minimize gift tax. One option is to spread the gift over a longer period of time to utilize the tax-free allowance each year. You can also take advantage of certain allowances that are available every 10 years.
It is also important to note that there are certain exemptions from gift tax, such as gifts within the family for specific purposes like education or home purchase. Therefore, it is worthwhile to inform yourself about the applicable regulations in order to minimize the tax burden.
I hope this information is helpful to you and that you can make an informed decision. Please feel free to contact me if you have any further questions.
Sincerely,
Lina Walter
