• Klaus Meitinger

Intelligent gifts.

066 Schenkung Investmentfonds

Gift. From 1 January 2018, new rules will apply to the taxation of investment funds' capital gains. Anyone who bought equity funds before 01.01.2009 can now use these so-called old funds for a particularly lucrative Christmas present.

"The new investment tax law opens up a lot of astonishing scope for tax planning in 2018," says Stefan Vollherbst, head of the Munich branch at bei der Privatbank ODDO BHF (private wealth reported on this in issue 03/17). "The banker continues: "Very few know, however, that owners of their family's so-called old funds will be able to secure tax-free income for a long time this year through targeted donations."

The background: Those who bought equity funds before the introduction of the flat rate withholding tax at the end of 2008 could assume that price gains from this investment would be tax-free for all eternity after expiry of the one-year speculation period. However - the eternity lasts only to end 2017. Dann makes the new Investmentsteuergesetz conclusion with the miraculously tax-free plant.

Irrespective of the purchase date, all funds as at 31.12.2017 are considered "fictitiously sold". On 01.01.2018 they will be "fictitiously purchased" again. The "fictitious" price gain realised by the old funds will then actually remain tax-free. However, this no longer applies to future earnings.

Actually, it's a scandal. After all, many investors had relied on the fact that the 2008 regulation would last. In order to mitigate this obvious disadvantage, the legislator grants an allowance of EUR 100000 for future income from these funds. Taxes only become due beyond this amount.

"Exactly here can be set, erklärt Vollherbst: If old fund portions are in the depot and these are given away still before year end to member of the family, the new exempt amount of 100000 euro develops with each presented one.

The banker illustrates this with an example: "A parent gives his or her two children old fund shares worth 400,000 euros each, i.e. exactly the allowance for gift tax. For both children, the increase in value from 2018 is now also tax-free in the amount of 100,000 euros. At the family level, the allowance has tripled from 100,000 to 300,000."

It is important to note that this tax allowance is not kept by the bank, but by the tax office. "Banks first deduct taxes on capital gains. Customers will then have to get them back via their income tax return."

As a special "delicacy", Vollherbst further explains, this donation could also be made to a so-called "Und-Depot" - in which the donor and the donee are noted. "By agreement, the custody account belongs solely to the donee, but the donor can prevent the fund units from being sold at an early stage. After all, they are intended to serve the long-term accumulation of assets in order to fully utilize the allowances created," the banker points out. It makes sense that the recipient of the gift, who is of age, grants the donor a power of attorney.

This idea can now be spun much further. Family members also include spouses or fiancées, relatives and in-laws of the straight line, (half-)siblings, nephews, nieces, uncles and aunts as well as foster parents and children.

For these groups of people, the allowances bei Schenkungen vary between 20000 and 500000 euros. "Theoretically, a portfolio of old funds can be distributed tax-free to a large number of beneficiaries. Within the family then a multiple at future free allowances is generated , concludes full autumn, the topic taxes on capital yields is then nevertheless nearly for eternity off the table;


Author: Klaus Meitinger