Despite the difficult economic conditions created by the spread of coronavirus in Poland, many people would like to maintain their liquidity at all costs. To this end, some of us will be forced to receive all kinds of financial assistance, including the one offered by our loved ones.
It is not known from today that a donation is the most common way to transfer ownership in the family. In principle, donations to the immediate family may be exempt from tax, but it is important to note that certain formalities have been completed.
Who and to what amount is tax exempt?
Tax group
Who belongs to her?
Tax-free amount
Group 1
the spouse,
descending (e.g. son, daughter,
grandchildren, great-grandchildren),
Forerunners (e.g. mother, father, grandparents),
siblings, stepdad,
stepmother, stepdaughter, son-in-law,
daughter-in-law, in-laws
9,637 PLN
Group 2
the succession of siblings,
the siblings of the parents,
conjuncts and spouses
stepdaughters, spouses
siblings and siblings
spouses, spouses
siblings of spouses,
Other spouses
progressive
7,276 PLN
Group 3
other persons,
not included in the others
groups
4,902 PLN
Within the group 1 distinguishes the so-called group 0, and includes:
- - the spouse,
- - descendents (son, daughter, grandson, great-grandchildren),
- - preliminary (mother, father, grandparents),
- - stepchildren,
- - siblings,
- - stepdad,
- - My stepmother.
For the group ‘0” all donations, regardless of their value, may be exempt from taxation. Thus, after exceeding the tax-free amount, i.e. 9,637 PLN, You can still use the exemption.
The receipt of a donation which exceeds the tax-free amount is always linked to the need to notify it to the competent tax office within the time limit 6 months after the date of the tax obligation on printing SD-Z2.
It is also very important that the transfer of funds must be documented by transfer to the buyer's bank account, credit card account or postal transfer.
A gift to a sister or brother and the property of a married couple
Tax authorities confirm that a donation to siblings may be exempt from inheritance and donation tax. If a donation to siblings can be tax-free, the question arises as to what if the donor has married and has joint property with her spouse?
This question was spent in the sleep of a taxpayer who was to receive a donation of money from his married sister. The taxpayer wondered if, in view of his sister’s common estate, he would have to pay off the half - donated amount, that is, the portion received from his sister’s husband.
He therefore requested the Director of National Tax Information to give an individual interpretation of tax law on inheritance tax and donations in relation to the tax consequences of the acquisition of funds by way of donations.
The applicant indicated that his sister intends to transfer to him by written agreement a donation of money of 150,000 PLN. These measures would come from the common property of the sister and her husband.
The donation agreement would be concluded between the applicant and his sister and the sister's husband, the applicant's brother-in-law, would accept the donation by giving written consent. The application indicated that a transfer of funds would be made to the bank account of the applicant.
The applicant also declared that he would make a donation to the tax office within 6 months after receiving it. Therefore, the taxpayer hoped to ask whether he would be exempt from the obligation to pay the tax on all donations received? From the Director of KIS (reference no.
0111-KDIB2-3.4015.3.2020.1.LM) We have learned that, according to the event presented, a future donation of funds to the applicant will only be made by his sister, since his sister's husband, only agreeing to a donation agreement by his wife, will not automatically become a party to the contract.
Therefore, a donation to the brother from the joint estate of the spouses will be wholly exempt from inheritance tax and donations because it will be made on the basis of a written donation agreement between the applicant and his sister.
People who will have to eat a cash injection from their closest family (group 0) may not pay inheritance and donation taxes, regardless of the amount received if they meet two Mandatory conditions
Documentation of donation
Another important element when making a donation to the immediate family is to properly document the funds transferred. One taxpayer who received a donation of money found this to be true. From an individual interpretation of tax law (reference no.
0111-KDIB2-2.4015.50.2019.3.MZ) We learn that the applicant has received a cash donation from his grandfather, in cash, of 100,000 PLN. Immediately after receiving the money, the taxpayer paid it on his own bank account and then informed the tax office.
In addition, he made a written donation agreement with his grandfather to complete the formalities. The applicant also pointed out that Grandpa does not have a bank account because he does not trust new technologies, so the money was transferred to him in cash.
In his opinion, the donation was paid to the bank account, so it is documented and there is no doubt that it comes from the closest ones. With this fact, he requested an individual interpretation from the Director of KIS. The taxpayer was sure that he was therefore entitled to a gift tax exemption.
The Director of KIS disagreed and requested the applicant to pay inheritance and donation tax. He explained that a donation from the closest family is, in principle, exempt from tax on condition that it is documented by a transfer to a bank account or a bill held by a cooperative savings and credit fund or postal transfer.
According to the Director of KIS, therefore, it is irrelevant what were the motives behind the donations by choosing to donate in cash. The Director of KIS stressed that the legislator clearly indicated what conditions must be met in order for the exemption to be applied, and in the present case these conditions were not fulfilled.
Thus, the applicant will have to pay the inheritance and donation tax in connection with the transfer of cash by his grandfather, while ignoring the bank transfer required by the Act.
In conclusion, people who will have to feed on a cash injection from their closest family (group 0) may not pay inheritance and donation taxes, regardless of the amount received if they meet two Obligatory terms.
After first, the donation must be submitted to the appropriate tax office within six months after its receipt in print SD-Z2 (the exception is a donation agreement drawn up in the form of a notarial act, where the recipient is no longer obliged to report that fact to the tax office, and any formalities in this case are carried out by a notary).
After second, it is necessary to document the transfer of funds to the buyer's bank account, the SKOK account or the postal transfer. In other cases, the tax payment will be inevitable.
Author: Paweł Boś
Junior Tax Consultant, related to Russell Bedford Poland 2018. Author of numerous articles on legal and tax matters, published in the industry press. Law student at Leon Kozminski Academy in Warsaw.