When inheriting and gifting cryptocurrencies such as Bitcoin & Co., various tax challenges arise in Germany, Austria, and Switzerland that investors should be aware of.
Inheritance and Gift Tax in Germany
Cryptocurrencies are considered assets and are therefore subject to inheritance or gift tax upon acquisition. This tax liability arises when both the heir or recipient and the deceased (testator) have a residence in Germany.
There are personal exemptions that vary depending on the degree of kinship:
- Spouse/partner: 500,000 Euros
- Children/stepchildren/grandchildren (if parents are deceased): 400,000 Euros
- Other grandchildren: 200,000 Euros
In addition to these exemptions, there are further tax exemptions available. Expert advice from a lawyer specializing in inheritance tax law can be very helpful in this regard.
Formal Requirements for Gifts
For gifts within the family, certain legal requirements must be adhered to for the tax office to recognize the transfer. A notarial certification as well as consultation with a tax advisor or legal expert is recommended.
International Tax Challenges
In cross-border cases, double taxation agreements (DBA) may become relevant. For example, the country of business assets or real estate also retains the right to tax according to DBA provisions. In Austria, inheritance tax has been abolished; however, taxation may still occur abroad for foreign assets.
Important Notes for Investors
The valuation of cryptocurrencies at the time of acquisition is crucial for tax calculation. Due to the volatility and often complex valuation of cryptocurrencies, careful documentation of all transactions and valuations is advisable to provide evidence to the tax office.
In summary, investors should be aware of personal exemptions when inheriting or gifting Bitcoin & Co., adhere to formal requirements, check international tax regulations, and seek professional advice early to avoid unexpected tax pitfalls.