Which donations are exempt from gift tax?
April 7, 2022 | 40,00 EUR | answered by Bernd Schreiber
Dear tax consultant,
My name is Emilia Hering and I have a question about gift tax. My grandmother recently gave me a large sum of money, and I am now wondering if I have to pay gift tax on it. I have heard that there are certain gifts that are exempt from gift tax, and I would like to learn more about it.
My grandmother is already of retirement age and wanted to provide me with financial support through the gift. She explained to me that she had informed herself beforehand and that the gift should be tax-free. However, I am worried whether I still have to pay taxes and what that would mean for me financially.
I have tried to educate myself on the various regulations regarding gift tax online, but the information is often very confusing and hard to understand. Therefore, I am now turning to you in the hope that you can provide me with clarity.
Could you please explain to me which gifts are exempt from gift tax and whether my grandmother assessed her gift correctly? Are there specific requirements that must be met for a gift to be tax-free? I would be very grateful if you could help me with this issue.
Thank you in advance.
Sincerely,
Emilia Hering
Dear Mrs. Hering,
Thank you for your question regarding gift tax. It is understandable that you are wondering if you have to pay gift tax for the money that your grandmother gifted to you. I would be happy to explain the relevant aspects of gift tax and address your specific situation.
Firstly, it is important to know that gifts within the family are usually tax-free. There are certain tax-free allowances for gifts between relatives within the framework of gift tax. These allowances may vary depending on the relationship. In your case, as a granddaughter, the current tax-free allowance is 20,000 euros. This means that you can gift or receive gifts tax-free up to this amount.
Since your grandmother gifted you a sum of money as financial support, it could be considered a gift within the family. As long as the amount is below the tax-free allowance of 20,000 euros, you would not have to pay gift tax.
However, it is important to note that there are some exceptions where a gift may still be taxable. This includes gifts to individuals who are not related to the donor or gifts that exceed certain allowances. In your case, it seems that none of these exceptions apply.
Overall, it appears that your grandmother has assessed the gift correctly and you are likely not required to pay gift tax. Nonetheless, it is advisable to gather all relevant documents and information and, if necessary, consult with an expert to ensure that everything is handled correctly and tax-free.
I hope that this information has been helpful to you. If you have any further questions regarding gift tax, please feel free to contact me.
Best regards,
Bernd Schreiber
