For people who can save money, it can be interesting to give (children) the children a financial Christmas present. Each year you can donate a certain amount tax free. This calendar year is even 1000 euros more than next year. How much can you give tax free and is it smart to transfer it now? What should you be aware of?
Up to a certain amount, it is possible to give tax-free money as a gift. This year the amount is one thousand euros more than in the coming calendar year: Parents may give their children a maximum of 6,604 euros, for gifts to grandchildren or other persons the amount is lower: 3,244 euros.
Higher amount of tax-free donations in 2021 due to the corona crisis
“The tax-free gift has been upgraded in connection with the corona crisis,” says Tjarko Denekamp, Schenken specialist and heirs at ABN Amro MeesPierson. “The idea was that people could help each other through the crisis by making extra donations. That amount must have been spent, “he says,” but I can not imagine that it has happened often with the corona crisis in mind. “
How much can you give tax-free in 2022?
Nevertheless, it could be interesting to discuss it during Christmas dinner. The thousand euros will be withdrawn again next year. In 2022, 5677 euros can be donated tax-free to children and 2274 euros to grandchildren and acquaintances. For the attentive viewer: this difference is actually greater than exactly a thousand euros. “Every year it gets a little bit higher because of the inflation correction,” Denekamp explains. “Currently, inflation is higher than previously calculated, the figures were already set at Budget Day.”
We do not know the details of the abolition of the ‘cheer tone’ yet
What about the one-time donations, such as the jubilation?
In addition to the annual tax-free donation, there are also ‘one-off exemptions’. That is: parents can transfer an increased amount once to their children between 18 and 40 years. That amount can be used freely (maximum 26,881), at study (55,996 euros) or at a home (maximum 105,302). The latter, the so-called jubilation tone, will be abolished from 2024.
“We do not know the details yet,” Denekamp said. “The question now is: when is he still there? A bill is likely to be tabled next year, and the change will take effect in 2023. But then there is also the ‘layer effect’: People who receive the amount still have two years to spend it in a good way. It is interesting to know later, especially if you have children who do not want or can not buy a house yet because they are still studying, but in the long run they will. But what it will look like in the near future is still speculation.
What we know for sure: in 2022, it is still possible to donate for the purchase of housing. In the coming calendar year, this amounts to 106,671 euros. For all types of one-off, higher donations, the recipient must submit a tax return to the tax authorities.
Taking advantage of the increased exemption is a one-time joker. You need to think about that
How high is the gift tax?
And how much tax do you actually pay if you want to transfer more than the deductible? It is about 10 percent on deposits of up to 128,752 euros from parents to their children. Then these percentages rise to 20 percent, or even to 36 percent (for grandchildren) or 40 percent (for others). Do you receive an amount higher than the exemption amount? Then you are required to file a tax return with the IRS.
“A donation seems very simple: transfer an amount and Kees is done, but it’s not easy,” Denekamp says. “Using the increased exemption is a one-time joker. You have to think about it carefully and it is often a calculation of what makes sense and when. I always say that you should look at it well and not let yourself be led by the feeling, but only start pouring when you have it all clear. ”
Do you want to stay informed about useful tips for managing your money and being inspired by how others manage their finances? So follow us on Facebook and Twitter†
Free unlimited access to Showbytes? There can!
Log in or create an account and never miss anything from the stars.