When you gift something, tax is due in many cases. Before 1 January 2010, the legal term for this tax was gift tax. Afterwards, the legal term is gift tax. The rates and exemptions depend on the amount of the acquisition and the relationship the transferee has to the donor.
Spreading donations over several calendar years and not giving more than the exemption each year can save gift tax. If a large amount is involved, one can choose to split the donation into parts that are still just taxed at a lower rate than would be due on the whole.
Sometimes it is possible to make a donation through a public benefit organisation (ANBI). This may be the case if you want to support something that is not itself an ANBI, but is supported by ANBIs. On the website of the tax authorities, you can check whether the charity you want to donate to is a so-called ANBI and thus qualifies for general exemption from gift tax.
If there are company assets, the business succession facility in the Inheritance Tax Act can be used in a number of cases. If that facility applies, business assets can - under certain conditions - be donated (partially) exempt.
Making donations can in many cases save inheritance tax due upon death. The savings to be realised upon death can be quite substantial in many cases.
For more information on saving gift tax, please contact us. We will be happy to advise you.
