Gift tax – Asset planning during lifetime
Inheritance tax and gift tax are directly linked. The transfer of assets takes generally place with the occurrence of the inheritance. In order to avoid a high inheritance tax for the heirs, assets can already be donated during their lifetime. In this case, however, the gift tax applies, which should be kept as low as possible or should be avoided completely at best.
The gift tax is levied essentially according to the same rules as the inheritance tax. The tax burden depends on the degree of relationship and the value of the gift. Through gifts during lifetime, allowances can be used, so that tax-free donations are possible. Every ten years, every recipient may take full advantage of the allowances for assets. In order to avoid high tax payments, the allowances therefore should be used in advance during lifetime.
Even if you receive a donation from abroad and you have a residence in Germany, the German regulations apply and the donation must always be reported to the tax office.