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bigduckontax
bigduckontax, Accountant
Category: Tax
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Experience:  FCCA FCMA CGMA ACIS
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I'm a German national but have lived in the UK

Customer Question

Hi, I'm a German national but have lived in the UK for almost ten years and have no plans to return. My parents want to transfer their house in Germany to me and I was wondering if there will be any tax implications, in the UK or Germany, for me. The value of the property is around £300k.
Submitted: 2 years ago.
Category: Tax
Expert:  Nicola-mod replied 2 years ago.
Hello, I am a moderator for this topic.
I can transfer this to the Tax category for you and you may get an answer regarding UK tax implications, but please note we do not have any Experts in the area of German tax.
Would you like to proceed?
Thank you,
Nicola
Customer: replied 2 years ago.

Yes please

Expert:  bigduckontax replied 2 years ago.
Hello, I am Keith, one of the experts on Just Answer and pleased to be able to assist you with your question. As far as the UK is concerned there are no tax implications unless your parents are themselves resident in the UK. If they are I will elaborate further when I receive your response. Germany, however, unlike the UK, does have a gifts tax. HG.Org [legal resources] have the following advice: 'Spouses, children, grandchildren, great grandchildren, parents, and grandparents are in class one. Tax rates in class one vary from 7% (up to 75.000 Euros), 11% (up to 300.000 Euros) to 15% (up to 600.000 Euros). Brothers and sister, nieces and nephews, parents-in-law are in class two. Tax rates in class one vary from 15% (up to 75.000 Euros), 20% (up to 300.000 Euros) to 25% (up to 600.000 Euros). Most other heirs and beneficiaries are in class three with a 30% inheritance tax rate.More than nominal exemptions are only available for spouses (500.000 Euros), children (400.000 Euros), grandchildren and great grandchildren (200.000 Euros), and parents (100.000 Euros). Spouses and children until age 27 may claim additional exemptions. The exemption available to other beneficiaries is only 20.000 Euros. Consequently, almost the entire estate may be subject to inheritance tax if decedent has no surviving spouse and descendants.The same classifications, tax brackets and tax rates apply to German gift tax. Nonetheless, lifetime gifts may reduce inheritance tax liability in Germany. Gifts made more than ten years before the date of death are not taxable, and after ten years the gift tax exemption can be used for another gift, which will not be subject to gift tax (but may be subject to inheritance tax if death occurs within 10 years).' Thus giving you a house in Germany by German resident parents could incur them, not you, in a gifts tax charge of some 7% on 23K Euros, say some 1,610 euros. I do hope that my reply has been of some assistance.
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4078
Experience: FCCA FCMA CGMA ACIS
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Expert:  bigduckontax replied 2 years ago.
Thank you for your support.