Can I pass on a property to my children in a tax-efficient way?
September 14, 2022 | 50,00 EUR | answered by Otto Dornbusch
Dear Tax Advisor,
My name is Katrin Gruhlke and I am facing the question of whether it is possible to transfer my property to my children in a tax-efficient manner. The property I wish to leave to my children has significant value, and I want to ensure that they are not burdened with high inheritance taxes.
Currently, I am concerned about how high the inheritance tax for my children could be if they were to inherit the property from me. I want to ensure that my children are not financially overwhelmed and that they can take over the property without a major tax burden.
Are there ways to transfer the property to my children in a tax-efficient manner? What tax aspects should be considered? Are there, for example, ways to reduce the inheritance tax burden for my children?
I would be very grateful if you could provide me with possible solutions and strategies to make the inheritance of the property tax-efficient. I want to ensure that my children can take over the property without financial difficulties and look forward to your expert advice.
Thank you in advance for your support.
Best regards,
Katrin Gruhlke
Dear Mrs. Gruhlke,
Thank you for your inquiry regarding the tax-optimized inheritance of your property to your children. As a tax advisor specializing in inheritance tax, I can show you various options and strategies to minimize the tax burden for your children.
First and foremost, it is important to know that in Germany, inheritance tax varies depending on the relationship. Children have a tax-free allowance of 400,000 euros, and beyond that, a tax rate between 7% and 30% is applied depending on the value of the inheritance. To reduce the tax burden for your children, you can take various measures.
One option is to gift the property during your lifetime. By transferring the value of the property to your children during your lifetime, you can make use of the tax-free allowance. However, it is important to note that gifts made within 10 years before the donor's death are taken into account, and the tax burden may be higher accordingly.
Another option is to make use of tax-free allowances and tax classes. By skillfully designing your will or setting up lifetime gifts, you can reduce the tax burden for your children. Also, utilizing tax benefits such as the exemption of family businesses can help minimize the inheritance tax burden.
It is important to seek individual and comprehensive advice in any case, as the tax situation varies from case to case and there are many individual factors to consider. I am available in my online consultation hours to analyze your specific situation and present tailored solutions.
I hope that these information have given you an initial overview of the possibilities for tax-optimized inheritance of your property. Please do not hesitate to contact me with any further questions.
Sincerely,
Otto Dornbusch
