Gift tax is levied on increases in assets acquired without the donor's own intervention. The object of taxation is the gift inter vivos. As a supplement to inheritance tax, gift tax is intended to contribute to a fairer distribution of assets. This supplement is necessary in order to prevent the avoidance of inheritance tax on future inheritance through gifts made during one's lifetime.

A gift inter vivos is considered to be, for example:

• any free gift inter vivos, insofar as the beneficiary is enriched by it at the expense of the donor
• the enrichment of a spouse or civil partner under a community of property agreement
• what is granted as compensation for a renunciation of inheritance
• the transfer of property on the basis of a foundation transaction inter vivos

The basis of assessment for the tax is the taxable acquisition. The taxable acquisition is the enrichment of the acquirer, unless it is tax-exempt. The assets and deductible liabilities are valued in accordance with the Valuation Act.

Of particular importance is the valuation of real property. Real property values are determined, if necessary, in a separate procedure by the situation tax offices. The valuation standard is the fair market value of the land.

The tax class is also decisive for the amount of tax. This is because the tax class has an effect on the amount of your personal tax rate and tax-free amount. Basically, the closer you are related to the donor, the less tax you pay on the gift.

The amount of tax further depends on whether factual tax exemptions are to be taken into account. Of particular importance from the exemption catalog are the allowance for household effects amounting to 41,000 euros for acquirers of tax class I, the allowance for other movable physical objects of 12,000 euros for acquirers of tax class I, the allowance of 12,000 euros for household effects and other objects together for acquirers of tax classes II and III. The acquisition of a family home is also tax-free in many cases.

The law also provides for various exemption options in the case of the acquisition of eligible business assets and shareholdings as well as agricultural and forestry assets.