---
title: "Schenkungsteuer: making the most of the EUR 400,000 allowance"
description: "Schenkungsteuer: an EUR 400,000 allowance per child every 10 years. Staggering, deadlines and strategies for transferring wealth tax-free."
canonical: "https://investboard.de/en/wissen/schenkungsteuer-freibetrag"
language: "en"
published: "2026-03-30"
modified: "2026-03-30"
last_verified: "2026-07-27"
author: "David Bartas"
author_url: "https://investboard.de/ueber-uns"
reviewer: "David Bartas"
reviewed: "2026-07-27"
---

# Schenkungsteuer: making the most of the EUR 400,000 allowance

Give tax-free every 10 years: how to do it right

## In short

The Schenkungsteuer (gift tax) allowance permits tax-free transfers every ten years: EUR 400,000 per child from each parent, EUR 500,000 for spouses. Because it applies per giver and recipient, a couple can pass up to EUR 800,000 to each child per decade. Gifted securities trigger no Abgeltungsteuer (flat tax); gifts must be reported to the tax office within three months.

- Give EUR 400,000 per child tax-free every 10 years
- The clock restarts with every gift: beginning early pays off
- Both parents can give independently of each other: up to EUR 800,000 per child per decade

Passing wealth down within a family is treated generously by German tax law, as long as you know the deadlines. The Schenkungsteuer (German gift tax) allowance lets you transfer substantial sums free of tax, and it renews every ten years.

Begin early, and over two or three decades you can move an estate that a single inheritance would have taxed long ago. This is not a loophole. It is the path the legislator intended.

> The most important variable in a gift is not the amount, but the time.

## The Schenkungsteuer allowance

How much can be transferred tax-free depends on the family relationship. The closer the kinship, the higher the allowance. The amounts are set in the Erbschaftsteuer- und Schenkungsteuergesetz (German inheritance and gift tax act) and apply to lifetime gifts just as they do to inheritances.

| Relationship to the giver | Allowance | Tax class |
| --- | --- | --- |
| Spouse, registered civil partner | EUR 500,000 | I |
| Child, stepchild | EUR 400,000 | I |
| Grandchild (parents still living) | EUR 200,000 | I |
| Parents, grandparents (on inheritance) | EUR 100,000 | I |
| Siblings, nieces, nephews | EUR 20,000 | II |
| Unrelated persons | EUR 20,000 | III |

What matters is a feature that is often overlooked: the allowance applies per giver and per recipient. Father and mother each have their own allowance toward every child. A couple can therefore transfer up to EUR 800,000 tax-free to a single child, EUR 400,000 from each parent.

## The 10-year window

Gifts from the same person to the same person are added together within 10 years. Once the total exceeds the allowance, Schenkungsteuer becomes due. Gifts from different people, from a father and a mother for instance, each keep their own separate allowance.

The allowance is not a one-time quota but a recurring one. After ten years have passed, it is available again in full. The decisive date is the day of the gift: someone who gives on 1 March of one year can give again up to the full allowance on 2 March of the tenth following year, without the first gift counting at all.

Within the ten-year window the opposite holds. Several smaller gifts to the same person add up. Transfer EUR 250,000 to a child one year and another EUR 250,000 three years later, and you have exceeded the EUR 400,000 allowance by EUR 100,000. Schenkungsteuer falls due on that portion.

This mechanism makes timing the real lever. Begin at 55 rather than 70, and you gain an additional decade, and with it a whole further allowance per recipient.

## Staggering across several children

Allowances multiply with the number of givers and recipients. A couple with two children commands four independent allowances, all of which arise anew every ten years.

| Recipient | From father | From mother | Total per 10 years |
| --- | --- | --- | --- |
| Child 1 | EUR 400,000 | EUR 400,000 | EUR 800,000 |
| Child 2 | EUR 400,000 | EUR 400,000 | EUR 800,000 |
| Total | EUR 800,000 | EUR 800,000 | EUR 1,600,000 |

In this way a couple can transfer EUR 1,600,000 tax-free to their two children, and the same amount again after ten years. The figures are the statutory allowances, merely added together here, not a forecast and not a promise of any particular fortune.

## Calculating Schenkungsteuer

When the allowance is exceeded, Schenkungsteuer falls due only on the portion above it, not on the whole gift. The rate follows the tax class and the size of the taxable acquisition. In tax class I, which covers children, spouses and grandchildren, it begins at 7 percent and rises in steps with the amount.

| Taxable acquisition up to | Tax rate (tax class I) |
| --- | --- |
| EUR 75,000 | 7 % |
| EUR 300,000 | 11 % |
| EUR 600,000 | 15 % |
| EUR 6,000,000 | 19 % |

The rate applies to the entire taxable acquisition, not in tiers. An example: a child receives EUR 600,000 at once, of which EUR 400,000 stays tax-free. On the remaining EUR 200,000, tax class I levies 11 percent, that is EUR 22,000 in Schenkungsteuer. Had the same amount come in two gifts more than ten years apart, it would have stayed entirely tax-free. The calculator shows the precise burden for your own situation.

## Gifting portfolio holdings

It is not only money that can be given, but a securities portfolio or individual positions from it. Technically this happens through a portfolio transfer with a change of owner: the holdings move from the giver's account into the recipient's. What matters is to tell the bank explicitly that the transfer is a gift. Otherwise it treats the transfer as a sale and withholds Abgeltungsteuer (German flat-rate capital gains tax). The gift is valued at the market price on the day of transfer.

A gift is not a disposal. No Abgeltungsteuer falls due for the giver, and the original acquisition cost together with the purchase date passes to the recipient. Should the recipient sell later, the gain is taxed from the original entry price onward.

This has a practical consequence: gifting securities with large paper gains shifts the latent tax burden along with them, rather than dissolving it. For Schenkungsteuer only the market price on the reference date counts, not the gain contained within.

## The gift agreement and documentation

A completed gift of cash or securities is valid even without a formal agreement. Even so, a written record is sensible, because it documents the reference date, the value and the parties involved, and so makes the ten-year window verifiable.

Two points are binding. First, a gift must be reported to the Finanzamt (German tax office) within three months; where there is a notarial deed, the notary takes care of this notification. Second, gifting real estate requires a notarial deed, as does a mere promise of a gift to be fulfilled only later.

With every gift, note the date, the amount or market price, and the recipient. This record is the basis for the next gift in ten years and for the notification to the Finanzamt.

## Strategy: planning gifts well

The rules give rise to a simple basic pattern: begin early, use the ten-year clock deliberately, and treat both parents as separate givers. Anyone who wants to transfer large sums plans in decades, not in single payments.

For more complex cases there are further instruments. A Nießbrauch (German usufruct, a retained right of use or income) lets you transfer assets while keeping the income or the right of use for yourself, which lowers the taxable value. With the so-called Kettenschenkung (chain gift), a transfer is routed through a close relative in order to draw on that person's allowance as well. Both routes are recognised, but they depend on careful structuring and belong in the hands of professional advice.

Giving is not a question of wealth, but of patience. The allowance rewards not the largest amount, but the earliest start.

**Key takeaways:**

- The allowance follows the family relationship: EUR 500,000 for spouses, EUR 400,000 per child
- It applies per giver and recipient, and renews every 10 years
- A couple can transfer up to EUR 800,000 tax-free per child and decade
- Gifted securities trigger no Abgeltungsteuer, and the acquisition cost passes along with them
- Every gift must be reported to the Finanzamt within three months

This article explains the statutory allowances and how they work. It is no substitute for individual tax or legal advice. For larger transfers, real estate, or structures such as Nießbrauch and Kettenschenkung, you should bring in a tax adviser or a notary.

## Frequently asked questions

### How high is the German gift tax allowance for children?

Children and stepchildren have an allowance of EUR 400,000 per parent, and it renews every ten years. Because the allowance applies per giver and per recipient, a couple can transfer up to EUR 800,000 per child and decade free of Schenkungsteuer (German gift tax). The amounts are set in the Erbschaftsteuer- und Schenkungsteuergesetz (German inheritance and gift tax act) and apply to lifetime gifts just as to inheritances.

### How does the ten-year rule for gifts work?

Gifts from the same person to the same person are added together within ten years; once the total exceeds the allowance, Schenkungsteuer (gift tax) becomes due. After ten years the allowance is available again in full, and the decisive date is the day of the gift. Transfer EUR 250,000 to a child and another EUR 250,000 three years later, and you exceed the EUR 400,000 allowance by EUR 100,000; only that portion is taxed.

### What happens if the gift tax allowance is exceeded?

Schenkungsteuer (gift tax) falls due only on the portion above the allowance, not on the whole gift. The rate follows the tax class and the size of the taxable acquisition; in tax class I, which covers children, spouses and grandchildren, it begins at 7 percent and rises in steps. An example: a child receives EUR 600,000 at once; EUR 400,000 stays tax-free, and the remaining EUR 200,000 is taxed at 11 percent, that is EUR 22,000.

## Sources

- [ErbStG § 16 Freibeträge](https://www.gesetze-im-internet.de/erbstg_1974/__16.html) · Bundesministerium der Justiz
- [ErbStG § 14 Berücksichtigung früherer Erwerbe (Zehnjahresfrist)](https://www.gesetze-im-internet.de/erbstg_1974/__14.html) · Bundesministerium der Justiz
- [ErbStG § 19 Steuersätze](https://www.gesetze-im-internet.de/erbstg_1974/__19.html) · Bundesministerium der Justiz
- [ErbStG § 30 Anzeige des Erwerbs](https://www.gesetze-im-internet.de/erbstg_1974/__30.html) · Bundesministerium der Justiz
- [Einkommensteuergesetz (EStG) § 20 Einkünfte aus Kapitalvermögen](https://www.gesetze-im-internet.de/estg/__20.html) · Bundesministerium der Justiz