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legal eagle
legal eagle, Attorney
Category: German Law
Satisfied Customers: 16341
Experience:  20 years of experience in all kinds of law, especially employment law and family law.
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An English citizen loaned a German national a sum of money

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An English citizen loaned a German national a sum of money for the education and upbringing of her children, including her living expences, the children were living in the philipines, the mother in Germany, this had an informal loan agreement. The German tax office want to tax her on the money, she cannot pay this and if pushed would have to become bankrupt. Would the English donor then become liable
Dear Customer,

thank you using Just Answer.

First of all according to German Tax Law I see no reason for taxation except the so-called Schenkungssteuer, where the money is taxed as a gift

Indeed the donor can become liable for this tax as either the donor or the one who received the donation has to pay the tax.

If one cannot pay the other can become liable

Customer: replied 4 years ago.
The receiver is now living in Iceland, and doesn't plan to return to live in Germany.
The donor is in his 80's and in a nursing home, and has no money to pay if he were liable.
But it was a loan not a gift, so in your opinion is there any tax liable, it is the donor's liability I am particularly interested in.
Thank you
Dear Customer,

thank you for your reply.

The donor has to proof it was a loan and not a gift.

A loan implies that he had the intention of demanding the money back.

But the whole problem is purely theoretical:

If the door lives in a nursing home and has not got any money it is highly unlikely that inland revenue wants him to pay the taxes.

So not to worry

If I have helped I would very much appreciate positive feedback

legal eagle and other German Law Specialists are ready to help you