Unreported Schenkung 2026: Penalties, Three-Month Deadline & Voluntary Disclosure

Below the Freibetrag, too: the notification duty still applies

This is the most common misconception around gifts. Many people assume that a Schenkung below the Freibetrag does not need to be reported. That is wrong.

§ 30 (1) ErbStG (Erbschaftsteuergesetz / German Inheritance and Gift Tax Act) is unambiguous. Any acquisition subject to Erbschaftsteuer (German inheritance tax, governed by ErbStG) — and Schenkungsteuer (German gift tax, governed by the same statute) follows the same rule — must be reported by the acquirer within three months of becoming aware of it, to the Finanzamt responsible for inheritance and gift tax. The donor is likewise required to notify (§ 30 (2) ErbStG).

The Freibetrag determines whether tax becomes payable. The notification duty exists independently.

Personal Freibeträge

A gift of EUR 10,000 to your child must also be reported to the Finanzamt. No tax becomes payable because the EUR 400,000 Freibetrag is far from being used up. The notification duty applies regardless.

What happens if you missed the notification?

The consequences depend on whether the non-notification resulted in a tax shortfall.

Case 1: Schenkung below the Freibetrag, no tax due

If the gift sits below the Freibetrag and, even after taking earlier gifts into account, no tax is due, the matter typically constitutes a regulatory offence (Ordnungswidrigkeit). The Finanzamt may impose an administrative fine.

In practice, isolated omissions involving small amounts are rarely pursued. Even so, you should make a late notification. The Finanzamt adds together all gifts within a ten-year window. Without documentation, you lose the overview.

Case 2: Schenkung above the Freibetrag, tax shortfall

If Schenkungsteuer was evaded by non-notification, the matter constitutes tax evasion under § 370 AO (Abgabenordnung / German Fiscal Code). That is a criminal offence, not a regulatory one.

Possible consequences include back payment of Schenkungsteuer with 6 percent interest per year (§ 235 AO); interest on the evaded tax running from the point at which the Finanzamt would have assessed the tax following a proper notification (BFH, judgment of 28.08.2019, Az. II R 7/17); a fine or custodial sentence of up to five years (§ 370 (1) AO); and in particularly serious cases (evaded tax of EUR 50,000 or more) custodial sentences of six months to ten years.

Realistic exposure by gift size (tax class II, siblings)

Four typical constellations from my advisory practice, each assuming the notification was skipped and the matter was later uncovered by the Finanzamt:

The figures are indicative. The concrete exposure depends on the degree of kinship, previous gifts already on record, and the personal context. In tax class I (child, spouse) the rates are lower, the underlying mechanism is identical.

Case 3: Several unreported gifts over the years

This scenario is particularly delicate. Where gifts have flowed regularly over years and, taken together, exceed the Freibetrag, a considerable tax claim can arise.

Example: parents gift their child EUR 50,000 every year without reporting any of the gifts. After eight years, EUR 400,000 have accumulated. The Freibetrag is exhausted. From the next gift onwards, Schenkungsteuer becomes payable. Without notification, the Finanzamt has no way of knowing that the Freibetrag has already been used up.

Catching up on the notification: how to proceed

Step 1: Take stock

List every gift made in the past ten years. For each one, record the date of the gift, the type of transfer (cash, real estate, securities, tangible assets), the value of the transfer, donor and recipient, and the kinship relationship.

Step 2: Test the tax relevance

Add together all gifts between the same persons within the past ten years. Compare the total with the relevant personal Freibetrag. If the total exceeds the Freibetrag, Schenkungsteuer is due on the excess.

Step 3: Informal notification to the Finanzamt

The notification can be informal. A simple letter to the Finanzamt responsible for inheritance and gift tax suffices.

The letter should set out the name and address of the donor, the name and address of the recipient, the kinship relationship, the object and value of the gift, the date of the transfer, and a note that the document constitutes a late notification.

Step 4: Bring in a Steuerberater (German tax adviser)

If the gifts exceed the Freibetrag you should consult a Steuerberater before submitting the notification. Particularly when drafting a late notification, an independent second tax opinion can be decisive — it influences whether the Finanzamt examines whether a criminal offence has been committed.

Voluntary disclosure under § 371 AO

If the unreported gifts caused tax to be evaded, a voluntary disclosure with exempting effect (strafbefreiende Selbstanzeige) may come into play.

Where several gifts have gone unreported over the years, restructuring the previous transfer pattern often makes sense — typically via a Familienpool (family-owned GmbH and Co. KG structure for asset pooling and succession control), set up as a partnership under civil law or as a GmbH & Co., which channels and documents ongoing gifts in a structured way.

There is one point many clients miss in their first meeting. Even without a voluntary disclosure with exempting effect, the assessment limitation period for Schenkungsteuer does not automatically run out.

The Bundesfinanzhof (Federal Fiscal Court, BFH) confirmed in its judgment of 27.08.2025 (Az. II R 1/23): so long as the Finanzamt requires the taxpayer to file a tax return after a notification, the start-of-period suspension under § 170 (2) sentence 1 no. 1 AO ends at the earliest with the close of the calendar year in which the return is filed, at the latest with the close of the third calendar year after the tax arose. Without a notification, the suspension never kicks in at all — the tax simply does not become time-barred.

The Bundesfinanzhof addressed the calculation of evasion interest where a Schenkung notification was omitted in its judgment of 28.08.2019 (Az. II R 7/17). The interest period starts at the point at which the Finanzamt, following a proper notification and tax return, would have assessed the tax — typically a few months after the gift. The clock does not wait for the assessment limitation period to expire. The implication is that anyone who stays silent for years owes the tax plus 6 percent interest per year from the hypothetical assessment date. In my practice, I see clients where the interest exceeds the original tax by the end.

Conditions for the exempting effect

• Completeness: the disclosure must cover all unreported gifts of the past ten years. A partial disclosure has not had exempting effect since 2015.
• Timeliness: the disclosure must be filed before discovery by the Finanzamt. Once an audit procedure has been initiated, voluntary disclosure is blocked.
• Back payment: the evaded tax must be paid promptly, plus 6 percent interest per year.
• Surcharge: where the evaded tax exceeds EUR 25,000, a surcharge of 10 percent applies (§ 398a AO). Above EUR 100,000 the surcharge is 15 percent; above EUR 1,000,000 it is 20 percent.

When voluntary disclosure does NOT work

A voluntary disclosure is precluded if a tax audit or tax investigation has already been announced, if the Finanzamt has already discovered the offence, or if the disclosure is incomplete (missing gifts).

A pressing note: you should never file a voluntary disclosure without legal or tax-advisory support. Formal defects can destroy the exempting effect. Anyone who wants to avoid such situations from the outset should make asset transfers as part of a structured succession plan.

Notification duty: the main exceptions

Not every transfer needs to be reported. § 30 (3) ErbStG sets out the exceptions:

• Notarially recorded gifts: where a gift is recorded by a notary (e.g. transfer of real estate), the notary handles the notification to the Finanzamt. You do not need to take action yourself.
• Acquisitions recorded by a court or authority: if a court or public authority recorded the acquisition, the acquirer's notification duty falls away.
• Transfers between spouses: customary occasional gifts between spouses (birthday, Christmas) typically do not trigger a notification duty, provided they remain within reasonable bounds.

Frequently asked questions

How does the Finanzamt find out about a gift?

The Finanzamt learns of gifts through several channels: bank reports of unusual account movements, notaries handling real estate transfers, land registry offices, tax audits, and inheritance tax returns filed on death. Transparency requirements are particularly tight around holding structures — Holdings (German tax-optimised holding companies, typically with Schachtelprivileg under § 8b KStG) — and corporate participations.

Does the notification duty lapse?

The standard assessment limitation period for Schenkungsteuer is four years. For negligent tax shortfall it extends to five years. For tax evasion the period is ten years (§ 169 (2) AO). The period only starts running at the close of the year in which the notification should have been filed.

Important: so long as the notification is not filed, the assessment limitation period does not start to run at all (§ 170 (5) no. 2 AO). Without a notification, Schenkungsteuer simply does not become time-barred.

Do I have to report a EUR 5,000 cash gift to my child?

Yes. The notification duty exists regardless of the size of the gift and regardless of whether the Freibetrag has been used up. No tax becomes payable, but the notification is mandatory.

Case from my practice: late notification of family gifts

An anonymised case shows how a late notification is handled professionally. A 71-year-old Frankfurt architect came to me in 2023 with the question: "I have given money to my three children repeatedly over the past 15 years. About EUR 1.8 million in total. I never reported any of it to the Finanzamt. Am I exposed criminally?" The gifts were clearly documented through account transfers: 2009 EUR 300,000 each towards the children's home purchases, 2014 EUR 200,000 each for renovations, 2019 EUR 100,000 each for setting up their practices.

We implemented three phases. First the risk analysis: more than EUR 600,000 had been gifted per child — exceeding the EUR 400,000 Freibetrag by EUR 200,000 per child. A Schenkungsteuer of 11 percent should have applied to the excess = EUR 22,000 per child, plus annual evasion interest of 6 percent from the hypothetical assessment date. For the 2009 gift, after 15 years that came to roughly EUR 19,800 of additional evasion interest per child. Total back payment per child: around EUR 42,000, EUR 126,000 in total. Plus the § 398a surcharge of 10 percent above EUR 25,000 per child = a further EUR 4,200 per child.

Second the strategic decision: a voluntary disclosure with exempting effect under § 371 AO rather than a plain late notification. Precondition: completeness of all unreported gifts of the past ten years — we had to disclose all three rounds of gifts, including those already time-barred for tax purposes but not criminally. Third the formal implementation: notarial notifications with valuation reports as of each respective gift date, a coordinated voluntary disclosure for father and children at the same time (both are subject to the notification duty under § 30 ErbStG), and a written deferral arrangement with the Finanzamt of 18 months for the back payment.

The outcome: voluntary disclosure with exempting effect accepted, no criminal proceedings, EUR 126,000 back payment deferred over 18 months, surcharge EUR 12,600. Without the disclosure, a tax evasion charge with materially heavier consequences was on the table (suspended sentence possible, plus all taxes and interest, plus procedural costs). My fee: roughly EUR 6,800 over six months. ROI comparison disclosure versus sitting it out: positive sign plus criminal-law certainty.

From my practice I know that the most common reason for delaying a voluntary disclosure is the hope "it won't come out". The Finanzamt receives a near-comprehensive flow of information today: bank control notices, notarial notifications, inheritance tax returns at death, and tax audits. Anyone who has avoided detection for 15 years has often built up 15 years of evasion interest — and that is precisely what makes the voluntary disclosure worthwhile in the end.

Next steps

If you have failed to report one or more gifts, you should catch up promptly. The longer you wait, the harder the situation becomes should the Finanzamt uncover the gifts on its own.

Read our guide on gift Freibeträge for a full overview of allowances and structuring options. Use the Erbschaftsteuer calculator to work out whether and how much tax is due. The inheritance navigator helps you map your situation in a structured way. For an individual assessment, arrange an initial consultation.

Related topics

• Schenkung Freibetrag: kinship classes and table — the full logic of allowances.
• The ten-year period for gifts: the three deadlines — when the Freibetrag becomes available again, and why Niessbrauch (usufruct under § 1030 BGB) suspends all three deadlines.
• Gifts to children: tax and structuring — standard cases and their pitfalls.
• Inheritance tax table: rates by tax class — what is added on death.

A personal conversation?

For unreported gifts the criminal dimension (§ 370 AO tax evasion) is the actual problem — not just the tax itself. A voluntary disclosure under § 371 AO has to be formally exact, otherwise it is ineffective. A 30-minute initial consultation clarifies whether voluntary disclosure, late notification, or another strategy is the right route.

Book a free initial consultation

External sources and legal texts

• § 30 ErbStG at gesetze-im-internet.de — notification duty for gifts (three-month deadline)
• § 169 AO at gesetze-im-internet.de — assessment limitation period
• § 170 AO at gesetze-im-internet.de — start of the assessment period (start-of-period suspension)
• § 370 AO at gesetze-im-internet.de — tax evasion
• § 371 AO at gesetze-im-internet.de — voluntary disclosure in tax evasion
• § 398a AO at gesetze-im-internet.de — refraining from prosecution upon voluntary disclosure (surcharge)
• BFH, judgment of 27.08.2025 — II R 1/23 — start-of-period suspension under § 170 AO after a request to file a tax return
• BFH, judgment of 28.08.2019 — II R 7/17 — running of evasion interest where a gift notification has been omitted
• BFH, judgment of 21.04.2010 — VIII R 6/08 — end-of-period suspension under § 171 AO after voluntary disclosure
• FG Berlin-Brandenburg, judgment of 05.11.2015 — 14 K 14201/14 — assessment limitation period and start-of-period suspension under a third-party notification duty

---