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German Tax Rules Outline Allowances and Holding Periods for Gifting Bitcoin

Gifting Bitcoin to children in Germany transfers both the asset and its original cost history, while falling under a 400,000-euro tax-free gift allowance per parent.

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Under German law, transferring Bitcoin to a child as a gift carries specific tax implications under both the Inheritance and Gift Tax Act and standard income tax provisions. Parents can gift up to €400,000 per parent to each child tax-free across a ten-year window, compared to allowances of €200,000 for grandchildren and €500,000 for spouses.

When receiving gifted cryptocurrency, the recipient automatically inherits the original acquisition date and purchase cost from the donor. Consequently, if the child sells the assets later, the original one-year holding period applies to determine whether the sale is subject to income taxation. The German Federal Ministry of Finance affirmed this classification in March 2025, following a Federal Fiscal Court ruling treating Bitcoin as an economic asset.

The report highlights several practical requirements, including a mandatory three-month deadline to notify the tax authorities of the transfer. Additionally, parents must consider key custody logistics and the risk that realized investment gains in a minor's name could impact eligibility for free family health insurance coverage.

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