How can I gift capital gains tax-efficiently to my children?
November 14, 2023 | 55,00 EUR | answered by Anna Karpinski
Dear tax advisor,
My name is Emma Heuser and I have a question regarding the tax-optimized gifting of capital gains to my children. Currently, I find myself in a situation where I have a considerable amount of capital assets and would like to pass on a portion of it to my children in a tax-efficient manner.
My concern is to provide financial support to my children without having to pay high taxes. I am worried that through careless gifts, high tax payments could be imposed on the capital gains of my children, and therefore I would like to gather information beforehand on how to implement this plan in a tax-optimized way.
What possibilities are there to gift capital gains to my children without risking high tax payments? Are there specific tax regulations or exemptions that I can utilize in this context? What tax aspects should I consider when transferring capital assets in order to save taxes?
I would greatly appreciate it if you could provide me with specific tips and recommendations on how to gift my capital gains to my children in a tax-optimized way, in order to achieve an optimal tax benefit for both myself and my children.
Thank you in advance for your help and support.
Best regards,
Emma Heuser
Dear Mrs. Heuser,
Thank you for your inquiry regarding the tax-optimized gifting of capital gains to your children. It is understandable that you are concerned about the tax aspects when it comes to passing on your capital to the next generation. I am happy to provide you with some tips and recommendations on how to implement this plan in a tax-optimized way.
First and foremost, it is important to know that under certain conditions, gifts are tax-free. In Germany, there is an annual tax-free allowance for gifts from parents to children amounting to 400,000 euros. This means that you can gift capital gains to your children tax-free up to this amount. This allowance applies every 10 years per child, allowing you to plan for the long term.
However, it is important to note that the 400,000 euro allowance for gifts among the living does not apply to all types of assets. For example, real estate or business assets are exempt from this allowance. However, there are no restrictions for capital gains.
To fully utilize the allowance, you can spread your gifts over several years. This way, you can gift up to 400,000 euros tax-free to your children each year. It is important to document the gifts and correctly account for any allowances.
Another important aspect when transferring capital is the design of the gifting contracts. It is advisable to seek advice from an experienced tax advisor to avoid tax pitfalls and to optimize the gifts.
In summary, tax-optimized gifting of capital gains to your children is indeed possible when you utilize the allowances correctly and carefully plan the gifts. I recommend seeking individual advice from a tax advisor to analyze your personal situation and find the best possible solution.
I hope this information is helpful to you and I am available for any further questions.
Best regards,
Anna Karpinski
