Who gives away assets, pays gift tax – and who inherits, must pay inheritance tax. Schenker and giftees can avoid the gift tax, however, if they already think in advance about the optimal tax procedure. At the same time, individual and early planning ensures that assets only get into the hands of those who should actually receive them.
1. Principle: When does gift tax apply?
Inheritance tax and gift tax run largely the same in Germany. Both types of tax are regulated in the Inheritance and Gift Tax Act (ErbStG). According to § 7 (1) no. 1 ErbStG, a donation exists if
This article does not replace tax or legal advice in an individual case. Facts, current law, jurisdiction, documentation and implementation remain decisive.