What is the difference between donations and inheritances?
October 10, 2022 | 50,00 EUR | answered by Lina Walter
Dear tax advisor,
My name is Roberta Ratzberg and I have a question regarding gift tax. I would like to know what exactly the difference is between gifts and inheritances.
The background to my question is that I recently received a large sum of money as a gift from my grandmother. Now I am wondering if this constitutes a gift and if I may have to pay gift tax. I am unsure if gifts are treated the same way as inheritances for tax purposes and what impact this could have on my financial situation.
Currently, I am somewhat concerned as I am not sure how to handle this situation. I would like to ensure that I understand all the tax aspects correctly and avoid any unexpected tax payments.
Could you please explain to me what the exact difference is between gifts and inheritances and if I have to pay gift tax in my case? What tax consequences could arise for me and what options do I have to minimize any potential tax payments?
Thank you in advance for your assistance.
Sincerely,
Roberta Ratzberg
Dear Mrs. Ratzberg,
Thank you for your question regarding gift tax. I understand your uncertainty regarding the differences between gifts and inheritances, as well as the tax consequences that may arise from them. I will try to explain these topics to you as comprehensively as possible.
The main difference between gifts and inheritances is that gifts are made during a person's lifetime, while inheritances occur after a person's death. A gift is a voluntary transfer of assets from one person to another without any consideration in return. In the case of an inheritance, the transfer of assets occurs after the death of the deceased to the heirs.
There are also differences in terms of the tax treatment between gifts and inheritances. In Germany, gift tax is levied on gifts, which must be paid by the recipient. The amount of gift tax depends on the value of the gifted assets and the relationship between the donor and the recipient. There are exemptions up to which gifts remain tax-free. Only when the value of the gift exceeds these exemptions, gift tax is due.
In contrast, inheritance tax is levied on inheritances in Germany, which must be paid by the heirs. There are also exemptions up to which the inheritance remains tax-free. However, inheritance tax also takes into account the relationship between the deceased and the heir. Depending on the relationship, there are different exemptions and tax rates.
In your case, where you received a sum of money as a gift from your grandmother, it is considered a gift. Therefore, you would need to check whether the value of the gift exceeds the exemption and whether you need to pay gift tax. It is advisable to seek advice from a tax advisor to ensure that you understand all tax aspects correctly and avoid any unexpected tax payments.
To minimize potential tax payments, you could consider exploring options to use exemptions or make tax-efficient arrangements. A tax advisor can help you find the best solution for you.
I hope this information has been helpful to you. If you have any further questions or require more detailed advice, I am at your disposal.
Best regards,
Lina Walter, Tax Advisor
