Tax on inheritance and donation - extension of the exemption

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Receiving an inheritance or donation gives rise to specific tax obligations. Sometimes you can take advantage of a special exemption in this regard - however, it is necessary to meet several key conditions. Recently, the regulations governing exemptions from the obligation to pay this type of tax have changed. Tax on inheritance and donations as well as obligations and exemptions related to it - we will discuss this issue in the article!

Inheritance and gift tax - when there is an obligation to pay

Let's start with the fact that receiving anything as an inheritance or donation each time gives rise to a tax obligation. He is always burdened by the heir or the recipient. Depending on the tax group in which it is located, the public levy is calculated in an appropriate amount. Judgment of the District Court in Lublin of October 24, 2013 (file reference number II Ca 590/13)

The obligation to pay the tax rests on the recipient, even if he was incorrectly informed by a notary about the tax exemption he is entitled to.

A notary who, as a payer, has paid the tax due without collecting it from the taxpayer beforehand, may demand its return on the basis of the provisions of the Civil Code on unjust enrichment.

If a party to a legal transaction has failed to prove that, as a result of the notary's failure to provide or incorrect information on the tax consequences of this activity, he suffered damage, he is not entitled to a compensation claim against the notary.

The inheritance and gift tax is usually higher, the higher the value of the acquired right or thing. There is, however, an exception to this rule, provided that the heir or the beneficiary belongs to the immediate family of the testator or donor.

Inheritance and donation tax - current exemption

Having the status of a member of the testator's or donor's immediate family guarantees, in principle, the possibility of avoiding the payment of tax. Of course, it will only be allowed if the taxpayer takes advantage of such an exemption, i.e. he makes a timely notification of the acquisition of rights or property by inheritance or donation. Information about the purchase should be submitted to the competent head of the tax office within 6 months from the date of acquiring the rights or property. In practice, this time limit starts to run from the date of receipt of the donation or the preparation of the donation agreement, and in the case of inheritance - from the date of the court's decision on the confirmation of inheritance becoming final or from the date of the notarized inheritance certificate (APD).

Pursuant to the current wording of the provision 4a para. 1 of the Act on Inheritance and Donation Tax, the acquisition of property or property rights by a spouse, descendants, ascendants, stepson, siblings, stepfather and stepmother is exempt from tax if:

  • report the acquisition of property or property rights to the competent head of the tax office within 6 months from the date on which the tax obligation arose pursuant to art. 6 sec. 1 points 2–5, 7 and 8 and par. 2, and in the case of acquisition by inheritance - within 6 months from the date of validation of the court judgment confirming the acquisition of the inheritance, subject to the provisions of paragraph 2. 2 and 4, and

  • in the case when the subject of the acquisition by way of a donation or order of the donor is cash, and the value of the property acquired jointly from the same person in the period of 5 years preceding the year in which the last acquisition took place, added to the value of recently acquired property and property rights, exceeds the amount specified in art. 9 sec. 1 point 1 - document their receipt with a proof of transfer to the buyer's payment account, on his account, other than a payment account, at a bank or a savings and credit union, or by postal order.

Judgment of the Provincial Administrative Court in Szczecin of September 23, 2020 (file reference number I SA / Sz 803/19)

Submitting the SD-3 notification after the deadline specified in Art. 4a paragraph. 1 u.p.s.d. (being a substantive legal term to which the institution of reinstatement of the deadline competent for procedural regulations does not apply), it does not have the effect of creating the right to benefit from the tax exemption.

Tax on inheritance and donation - new rules entitling to exemption

The catalog of people entitled to take advantage of the exemption from the obligation to pay inheritance and donation tax will most likely be expanded soon. In addition to the current persons entitled to take advantage of the exemption in question, this right is also available to persons who have stayed or are still staying with a foster family or in a family children's home, as well as persons who are a foster family or form a family children's home.

According to the lawyers, the proposed change is a good solution because it takes into account the so far overlooked persons who are also members of the testator's or donor's immediate family. The legislator also does not rule out extending the proposed amendment to include caregivers and charges of care and educational institutions. In practice, relationships between such people can sometimes be much stronger than between members of the same family.

The new solutions will therefore allow the tax exemption to be applied to people who are not related to each other in any way. Currently, inheriting or accepting a donation between such persons was associated with the necessity to pay the tax at the highest possible rate. People who are unrelated to each other are included in the third category of taxpayers, in which the highest tax values ​​apply.

Tax on inheritance and donations - notification of exemption

Regardless of when the amendment to Art. 4a of the Act on inheritance and donation tax, the legislator will not change the way of using the tax exemption. In other words, each entitled person must remember to keep a 6-month deadline for submitting an appropriate declaration of will / tax declaration.

Information on the purchase of an inheritance or donation must be submitted on the SD-Z2 form, which is available for download at any tax office and via the Internet. Filling it in should not be a major problem - in the form, we provide the data of the heir and testator, or the data of the recipient and donor. It is also necessary to indicate the degree of relationship between such persons - e.g. father-son, mother-daughter, grandfather-grandson, husband-wife. The information must also take into account the nature and value of the rights, money or property received. Start a free 30-day trial period with no strings attached!

As a rule, the SD-Z2 form is submitted to the tax office competent for the place of residence of the heir or the beneficiary. If, however, the acquired property includes real estate or a cooperative ownership right to the premises, the notification should be submitted to the office competent for the location of the real estate.

Submitting the form after the deadline, unfortunately, does not entitle you to take advantage of the tax exemption. In other words, the tax authority will charge tax in such a situation - the recipient or the heir may then only count on a lower tax due to remaining in tax group I (unfortunately, it will have to be paid). However, if you manage to take advantage of the exemption, the eligible person will be able to obtain, upon his request, a certificate confirming this fact (the cost of such a document is PLN 17).

Inheritance and donation tax - summary

The tax exemption for the purchase of a donation or inheritance will be significantly extended soon. In addition to the current group of immediate family members who have the right to take advantage of the exemption, they will be joined by people who are not related to the testator or donor - these will be people who have stayed or are still staying in a foster family or in the family children's home and people who are a foster family, possibly they create a family orphanage. The plans also include adding caregivers and charges of care and educational institutions (i.e. people who do not have to be related to each other). Regardless of the extension of the catalog of persons entitled to benefit from the exemption from the need to pay inheritance and donation tax, the entitled person may take advantage of it only if he informs the relevant tax office about the acquisition of rights or things by inheritance or donation within the appropriate 6-month period.