Which tax class applies to grandchildren for gifts?
July 1, 2023 | 60,00 EUR | answered by Eiko Hoffmann
Dear tax advisor,
My name is Roberta Zellmann and I am facing the question of which tax class applies to grandchildren in the case of gifts. My grandparents would like to gift me a larger sum of money and I am wondering to what extent this is relevant for tax purposes.
Currently, I am unsure whether my grandchildren fall into a lower tax class and could therefore benefit from lower tax rates. I am concerned that high taxes could be levied on the gift and would like to know in advance which tax class applies to gifts to grandchildren.
I would appreciate it if you could assist me and provide me with information on which tax class applies to grandchildren in the case of gifts. Are there ways to save taxes or avoid tax rates?
Thank you in advance for your support and advice.
Sincerely,
Roberta Zellmann
Dear Mrs. Zellmann,
Thank you for your inquiry regarding the tax class for grandchildren in the case of gifts. In general, gifts to grandchildren are classified under tax class I. This tax class includes direct relatives, such as children and grandchildren, and is usually associated with lower tax rates than other tax classes.
When making gifts to grandchildren, there are certain tax-free allowances that depend on both the relationship and the value of the gift. Currently, the tax-free allowance for grandchildren in tax class I is 200,000 euros every 10 years. This means that gifts up to this amount are exempt from tax. If the gift exceeds the tax-free allowance, gift tax will be applicable.
It is important to note that the amount of gift tax depends on various factors, such as the value of the gift, the relationship, and the state where the recipient resides. An exact calculation of gift tax can therefore only be done on a case-by-case basis.
To save taxes or avoid tax rates, there are various options. One option is to spread the gift over several years to make optimal use of the tax-free allowances. Gifts with reservation of usufruct or lifelong right of residence can also offer tax advantages. However, it is advisable to seek professional advice to avoid tax pitfalls.
I hope this information helps you and answers your question regarding the tax class for grandchildren in the case of gifts. I am available for individual consultation and precise calculation of gift tax.
Best regards,
Eiko Hoffmann
Tax consultant
