gift tax
noun · Schenkungsteuer
Schenkungsteuer, and unlike the UK, Germany taxes lifetime gifts as a matter of course. Every freigebige Zuwendung is charged, § 7 ErbStG, and gifts from the same person are added up over a rolling ten years, § 14 ErbStG, so the allowance refreshes only every decade.
Which translation, when
Why
Gift tax is Schenkungsteuer, and the trap is that the UK has no standalone gift tax while Germany very much does. In the UK a lifetime gift is normally a potentially exempt transfer: it falls out of charge if the donor survives seven years, and only then, or on death within the period, does inheritance tax reach it. Germany charges the gift itself. Under § 7 ErbStG every freigebige Zuwendung, every gratuitous enrichment of the recipient at the giver’s expense, is a taxable event, using the same Steuerklassen and Freibeträge as Erbschaftsteuer, § 15 and § 16 ErbStG. The mechanism that shapes advice is § 14 ErbStG: gifts from the same person to the same recipient within ten years are added together, so the personal allowance is not a one-off but refreshes each ten years, which is why German succession planning runs on a decade clock. So translating gift tax as Schenkungsteuer is right, but importing the UK seven-year survival logic is wrong; the German question is the ten-year Zusammenrechnung, not whether the donor lived seven years.
Typical mistakes
- Germany taxes lifetime gifts systematically, § 7 ErbStG, so the UK notion that a gift escapes if the donor survives seven years does not carry across; there is no potentially exempt transfer in German law.
- Gifts are aggregated over ten years, not seven, § 14 ErbStG, and the allowance refreshes only each decade, so applying a seven-year rule to a German gift is wrong.
- Schenkungsteuer shares the statute, classes and allowances of Erbschaftsteuer, § 15 and § 16 ErbStG, so a gift between the same parties is not taxed on a separate, more generous scale.
What matters
Structuring lifetime giving to a German-resident family, the plan turns on the ten-year Zusammenrechnung of § 14 ErbStG and the allowances of § 16 ErbStG, not on the donor surviving a period. A memo that carries over the UK seven-year potentially-exempt-transfer rule gives advice German law does not support.
What the machine misses
Machine output renders gift tax as Schenkungsteuer correctly, then lets the English framework ride along. It leaves the reader with the UK assumption that a gift is only potentially taxable and drops out after seven years, when German law charges every freigebige Zuwendung under § 7 ErbStG and adds gifts up over ten years under § 14 ErbStG. The rendering hides the decade clock that actually governs the German charge.
Examples
| liable to gift tax | der Schenkungsteuer unterliegen |
| the gift tax allowance | der Freibetrag bei der Schenkungsteuer |
| a gift within the ten-year period | eine Schenkung innerhalb des Zehnjahreszeitraums |
| gift and inheritance tax | Schenkung- und Erbschaftsteuer |
More notes on these sections
inheritance tax Erbschaftsteuer