GIFT OF ASSETS BETWEEN CLOSE RELATIVES: TAX RISKS AND LEGAL WAYS TO AVOID THEM
- Law office ANNA IGNATENKO & Associates
- Apr 7
- 2 min read
The provisions of Law No. 4839/2021 introduced a tax-exempt limit of 800,000 euros for the gifting of assets (real estate, money, etc.) between close relatives of the first category, namely spouses, partners (under cohabitation agreements), children, and parents.
If the taxable value of the assets being gifted to close relatives exceeds 800,000 euros, a tax is levied at a flat rate of 10% on the amount exceeding the tax-exempt limit.
When gifting assets to close relatives, it is important to comply with all legal requirements; otherwise, you risk paying taxes or fines.
When executing notarized documents for the transfer of real estate, all payments must be made exclusively using banking payment instruments (bank transfer or check).
When gifting money between close relatives up to 800,000 euros, this amount is not subject to tax, provided that the transfer was made through a bank, i.e., from the donor's bank account to the recipient's bank account or via a bank check.
If the donor deposits the money in cash into the recipient's bank account, the tax authority will impose tax on the entire amount from the first euro. For example, if a father deposits 10,000 euros in cash into his son's bank account, this amount will be subject to tax at a rate of 10%, meaning a tax of 1,000 euros will be applied.
In the case of consecutive acts of gifting involving individuals who are not entitled to the tax-exempt amount of 800,000 euros (e.g., a gift from a child to a parent, followed by a gift from that parent to another child), the tax authorities examine the circumstances and purpose of these gifts, as well as the time period between them.
In cases where it is determined that the ultimate beneficiary is an individual who does not belong to the first category of close relatives (e.g., a brother or sister), and that the consecutive gifts were made with the intention of avoiding taxation, a tax of 20% will be levied.
The amount of the gift must be confirmed and justified by the income declared by the donor. If the donor has no official income, the tax authorities may initiate an investigation into the source of the funds.
Declarations of monetary gifts are submitted through the myProperty platform of the AAΔE tax service.
To avoid tax risks and complications when arranging a gift, seek professional advice at our law firm, IGNATENKO ANNA & Associates. We will assist you in properly preparing the documents and help you avoid additional expenses and tax penalties.