What tax exemptions apply to gift tax?
April 10, 2024 | 60,00 EUR | answered by Lina Walter
Dear tax advisor,
My name is Felix Weise and I have a question regarding gift tax. My grandparents want to give me a larger sum of money, and I am concerned about the tax burden that may come with it. I have heard that there are tax-free allowances that are taken into consideration when it comes to gift tax. Could you please provide me with more information on the applicable tax-free allowances?
My grandparents are planning to gift me a sum of 50,000 euros. I am unsure if I will have to pay taxes on it and if so, at what rate. I know that there are tax-free allowances for gift tax, but I am not sure if they apply to my situation and how much they are. It is important to me that I do not have to make unexpected tax payments, so it would be helpful if you could explain to me which tax-free allowances apply to gift tax and if they can be applied to my gift.
I would greatly appreciate your support and advice to ensure that I do not overlook any tax payments and incur unnecessary costs. Thank you in advance for your help.
Sincerely,
Felix Weise
Dear Mr. Weise,
Thank you for your inquiry regarding gift tax. It is understandable that you are concerned about the tax implications associated with the planned gift from your grandparents. I am happy to explain to you how the tax-free allowances for gift tax work and whether they apply to your situation.
There are indeed tax-free allowances that are taken into account for gift tax. These allowances determine the amount of money you can receive as a gift tax-free. Generally, for gifts between grandparents and grandchildren, there are tax-free allowances of 20,000 euros every 10 years. This means that you can receive up to a total of 20,000 euros tax-free from your grandparents within a 10-year period.
In your case, if your grandparents would like to gift you a sum of 50,000 euros, the tax-free allowance of 20,000 euros would be utilized. For the remaining amount of 30,000 euros, gift tax would be applicable. The amount of gift tax depends on the relationship between the donor and the recipient as well as the value of the gift.
Gift tax is calculated based on a tax rate that varies depending on the value of the gift. There are different tax brackets with different tax rates. The higher the value of the gift, the higher the tax rate. However, there is also a tax rate that specifies a fixed percentage for gift tax.
It is important to note that gift tax is usually paid by the donor. This means that your grandparents would be responsible for paying the tax if gift tax is applicable due to the gift. It is advisable to consult with a tax advisor beforehand to clarify the tax implications of the planned gift and to potentially find tax-efficient solutions.
I hope this information is helpful to you and I am available for any further questions you may have. Please do not hesitate to contact me if you need further assistance.
Best regards,
Lina Walter
