When do I have to report a gift to the tax office?
April 2, 2023 | 50,00 EUR | answered by Fred Wittik
Dear tax advisor,
my name is Anna Krause and I have a question regarding gift tax. My grandfather wants to gift me a property worth 200,000 euros, as he is no longer able to use it himself. So far, I was unsure if I have to report this gift to the tax office and when this is necessary.
I am worried that I may face high penalties or tax payments due to a possible failure to report the gift. Additionally, I am unsure if I should report the gift to the tax office before the transfer of the property or after.
Could you please explain to me when I need to report a gift to the tax office and what steps I should take? Are there any deadlines I need to meet, and what documents are required to properly report the gift?
Thank you in advance for your help.
Best regards,
Anna Krause
Dear Mrs. Krause,
Thank you for your question regarding gift tax. It is understandable that you are concerned about when and how to report your grandfather's gift to the tax office in order to avoid any penalties or tax payments.
In general, gifts within the family or to close relatives must be reported to the tax office if they exceed certain tax-free allowances. The tax-free allowance for gifts between grandparents and grandchildren is currently 200,000 euros. Since the property your grandfather wants to gift you is also valued at 200,000 euros, the gift would be tax-free in your case.
Nevertheless, it is important to report the gift to the tax office to avoid any potential issues. The report must be made within three months of receiving the gift. You can do this either in person at the tax office or in writing using a form. You should specify the type of gift, the value of the gift, the names of the donor and recipient, and the date of the gift.
It is advisable to report the gift to the tax office before transferring the property in order to initiate all necessary steps in a timely manner. Additionally, you should include all relevant documents such as the gift agreement, land registry extract, and a valuation of the property to report the gift correctly.
In your case, since the gift is tax-free, you do not have to pay gift tax. However, please note that the gift must still be reported in your income tax return.
I hope this information is helpful to you. If you have any further questions, please feel free to contact me.
Sincerely,
Fred Wittik
