Joined Brokerage Account and Church Tax

[Frantic 67]

Me and my wife would like to open a joined brokerage depot ( gemainschaftdepot ). I pay church tax but she is not liable to church taxes.

Next year we will do, by the way, our first joine tax claim/declaration.

 

How it works the church tax on the gains in this case ? If we buy an ETF or a stock, for example, then we sell it and we have a surplus, how the church tax will be applied ?

 

Edit: I want the brokerage depot managing all the tax things.

 

[Frantic 67]

nothing ? 

 

in the meanwhile I sent an inquiry to Flatex...I hope to receive an answer before the end of the year

 

 

[PandaMunich 16,086]

You will have to pay church tax on your half of the capital income.

[Frantic 67]

45 minutes ago, PandaMunich said:

You will have to pay church tax on your half of the capital income.

 

Hi Panda,

 

thanks for your input. As far as you know is this something that can still be managed by the broker itself or will I have to manage it separately in my steuererklarung ?

[PandaMunich 16,086]

It is done automatically by the broker.

Only if you explicitly forbid your broker to deduct church tax, will you have to file an Anlage KAP as part of your tax return so as to pay the church tax you owe: https://www.finanztip.de/steuererklaerung-anlage-kap/#:~:text=Anleger%2C%20die%20Kirchenmitglieder%20sind%2C%20m%C3%BCssen,dann%20%C3%BCber%20die%20Steuererkl%C3%A4rung%20festgesetzt.

[Frantic 67]

Hummm... Flatex answered me:

 

Für die Eröffnung eines Gemeinschaftsdepots ist es erforderlich, dass bei beiden Antragstellenden identische steuerliche Verhältnisse vorliegen. Ist z. B. ein Antragssteller im Ausland und der andere im Inland steuerpflichtig, ist eine Eröffnung aktuell nicht möglich. Das betrifft auch die Kirchensteuer.

 

 

If I am not wrong they are saying that in our situation we can't open a joint account because our "taxability" situation is different due to the Church Tax. It looks like to me a bit strange.

 

[PandaMunich 16,086]

2 minutes ago, Frantic said:

If I am not wrong they are saying that in our situation we can't open a joint account because our "taxability" situation is different due to the Church Tax.

Yes, that is what they're saying.

 

Solution: leave the church 

General information for the whole of Germany: https://www.kirchenaustritt.de/english.htm

In Munich: https://stadt.muenchen.de/service/info/kirchenaustritt-erklaeren/1063731/

[Frantic 67]

My wife wants our children to be catholic and baptised (at least this is the last update on the topic...she says a lot of things and change mind a lot of times on all topics  ), I honestly don't give a crap about it.

I am not sure we could do this If i leave the "club".

 

Would opening an account just on my name and give her power of attorney a fair solution ? Ok, I will pay FULL  church taxes even if I should not , belonging to her  half of the saving we will monthly  put there 

 

In the meanwhile I will check with smartbroker, it is the only other broker with decent fee (ok, don'T tell me about the spread) and that offers a joined account.

 

EDIT: or better, doing the contrary, so we will not have to pay church tax at all. I am not sure if this would be legal for tax point of view

[PandaMunich 16,086]

23 minutes ago, Frantic said:

My wife wants our children to be catholic and baptised (at least this is the last update on the topic...she says a lot of things and change mind a lot of times on all topics  ), I honestly don't give a crap about it.

I am not sure we could do this If i leave the "club".

No, you couldn't.

You can't have your cake and eat it too.

 

23 minutes ago, Frantic said:

Would opening an account just on my name and give her power of attorney a fair solution ? Ok, I will pay FULL  church taxes even if I should not , belonging to her  half of the saving we will monthly  put there 

If she puts her own money into an account that is only in your name, there may be a gift tax problem, see below.

 

23 minutes ago, Frantic said:

doing the contrary, so we will not have to pay church tax at all. I am not sure if this would be legal for tax point of view

You wouldn't have a church tax problem if you pay into an account in her name only.

Why?

Because that money would no longer be yours but hers, you "gift" her everything that enters her account: https://kpmg--law-de.translate.goog/en/client-information/vermoegensuebertragungen-unter-ehegatten-koennen-schenkungsteuer-ausloesen/?_x_tr_sl=de&_x_tr_tl=en&_x_tr_hl=en-US&_x_tr_pto=wapp

 

However, you and she may have a gift tax problem if the amount you paid in exceeds 500k€ within a rolling 10 year period, see here.

Gift tax is owed jointly, i.e. the Finanzamt can ask either of you to pay the owed gift tax - they usually try the richer spouse first.

 

[Frantic 67]

but if the money we put in the broker account comes from an existing  joined girokonto ? Would be that still a gift ?

[PandaMunich 16,086]

1 hour ago, Frantic said:

but if the money we put in the broker account comes from an existing  joined girokonto ? Would be that still a gift ?

Yes.

 

We will assume that there are 1.2 million € in the joint Girokonto, and that both of you earned that money equally.

In this joint Girokonto, 600k€ belong to the husband and 600k€ to the wife.

 

If you hadn't earned the money in that Girokonto equally, if the transfers spouse1-->spouse2 exceeded 500k€ within the last 10 years, you will have already had a gift tax problem with this joint Girokonto. And even of you hadn't breached the 500k€ limit, you will still have used up parts of the 500k€ allowance, it will no longer be there to use now that you want to move the money to her Depot.

Of course, if you are in the default marriage Güterstand (matrimonial property regime) of Zugewinngemeinschaft, you can do a Güterstandsschaukel, i.e. basically simulate what would happen if you got divorced and your assets would need to be divided between you (non-earning spouse would get half of what the earning spouse earned during the marriage).

Zugewinngemeinschaft means that anything you earned after getting married gets shared equally between both spouses. But what you inherit or had received as a gift, e.g. from your parents, during the marriage is still yours alone!

 

Let's assume that you do not do a Güterstandsschaukel and just open a Depot that is in the wife's name only and transfer the 1.2 million € from the joint Girokonto into your wife's Depot.

--> you just gifted your wife 600k€ and if there had been no prior gifts during the last 10 years, this means that you are 100k€ above the gift tax free allowance between spouses of 500k€

--> you owe 11,000€ in gift tax: https://www.smart-rechner.de/schenkungssteuer/rechner.php

[Frantic 67]

Gotcha, there is no hope, I guess it is really much simpler to just quit being catholic. 

 

Thank you for your help Panda, as usual very detailed and appreciated.

 

 

EDIT: well, on the other side I have to say that we will be definitely under the 500k in 10 years 

[PandaMunich 16,086]

30 minutes ago, Frantic said:

EDIT: well, on the other side I have to say that we will be definitely under the 500k in 10 years 

Don't forget that you still have to notify the Finanzamt that is responsible for gift/inheritance tax of these "gifts" (even if you don't end up owing gift tax!), so that they can start keeping their own list, to check that you really don't exceed those 500k€ within 10 years.

The content of this notification is laid down in §30 (4) ErbStG: https://www.gesetze-im-internet.de/erbstg_1974/__30.html

 

Since you live in Munich, the responsible Finanzamt for gift/inheritance tax is: https://www.finanzamt.bayern.de/Informationen/Steuerinfos/Haeufig_gestellte_Fragen/Erbschaft-_und_Schenkungsteuer/default.php

• Finanzamt Kaufbeuren
  Remboldstr. 21
  87600 Kaufbeuren
  Telefon: (08341) 80 20
  E-Mail: poststelle.fa-kf@finanzamt.bayern.de

[Frantic 67]

I thought I should not report if I was not reaching the limit. 

I did not reported the money sent by my parents in the last 3-4 years (around 2 transactions) and I read now that I should have done this not late then 3 months. Now I am a bit concerned, what I risk ?

[PandaMunich 16,086]

Don't worry, just send them the notifications for these old gifts now.

The worst that will happen is a letter telling you to remember to do it within 3 months for the next gift.