You can annually gift money tax-free up to the maximum level of the gift tax allowances. In connection with COVID-19, the gift tax allowances have been increased by EUR 1,000 for the current year only. No tax is payable on gifts to children worth up to EUR 6,604, or gifts to grandchildren and other third parties worth up to EUR 3,244.
For children aged between 18 and 40, there is a one-off increase to: EUR 26,881 (freely to spend), or EUR 55,996 if the money is used to finance a study, or EUR 105,302 if the money is used to finance a home (this exemption also applies to other third parties who meet the criteria). If your child does not meet the criteria, but their partner does, the gift can also be made. If the gift is made before 1 January 2022, it will not count towards calculating your Box 3 assets, saving you Box 3 tax on those assets. Your child will not have to pay Box 3 tax either, assuming that the money gifted is used for one of the purposes listed above before 1 January 2022, or the tax-free allowance of EUR 50,000 (or EUR 100,000 if your child has a partner for tax purposes) has not yet been fully utilised.
If the gift exceeds the allowance, a gift tax return will need to be filed. Please note that the gift tax return must be filed within two months of the end of the calendar year in which the money was gifted. For gifts made in 2021, the gift tax return must be filed before 1 March 2022.
If you have any questions, please feel free to contact us without obligation.