Inheritance and donation tax – changes. Tax-free amounts may increase, there is a bill

There may be changes to inheritance and donation tax. A draft on this matter was prepared by the Sejm’s extraordinary committee for deregulation. As explained, “the purpose of the amendment is to make the tax-free amounts more realistic”. The changes would apply from January 1, 2023.

It is a bill amending acts aimed at eliminating unnecessary administrative and legal barriers, which provides for, inter alia, changes in the act on inheritance tax and donations. The draft was submitted by the special committee for deregulation. The Commission will be represented by a deputy in the works on the bill Bartłomiej Wróblewski from PiS.

As we read on the pages of the lower house, the bill was sent to first reading.

“The proposed change is aimed at making it more realistic tax-free amounts provided for in the Act of July 28, 1983 on inheritance and donation tax. The current amounts have been in force for almost 20 years, i.e. from 01/01/2003, when they were approximately 12 times, 9 times and 6 times the minimum wage at that time (PLN 800 in 2003). The draft provides for increasing these amounts to 12, 9 and 6 times the current minimum wage (PLN 3010) “- we read in the justification attached to the draft.

Inheritance and donations – what changes?

Piotr Juszczyk, chief tax advisor at inFakt, pointed out that currently, in the case of donations and inheritances, there are three so-called tax groups that include different categories of people and in which the tax-free amounts vary.

The first group includes the closest family: parents and children. “Donations in this group are generally exempt from taxation. However, you must notify the tax office within six months of receipt of any donation whose value exceeds PLN 9,637. According to the parliamentary draft, this amount is to be increased almost four times – to PLN 36,120” Juszczyk explained.

In the second tax group, which includes extended families, such as uncles or aunts, the value of the tax-free donation is to increase from PLN 7,276 to PLN 27,090. In turn, the third group includes all the other donors and testators. “The free amount in their case is currently PLN 4,902. According to the draft, after the changes, it is to be PLN 18,060” – indicated the tax advisor.

According to the prepared draft, the free amount would be:

– for group 1PLN 36 120 (currently PLN 9,637),

– for group 2PLN 27,090 (PLN 7276),

– for group 3PLN 18,060 (PLN 4902).

The changes, if adopted, are to enter into force on January 1, 2023.

“For the first group, taxation and formalities should be abolished”

Although Piotr Juszczyk noted that the proposed changes are beneficial for taxpayers, in his opinion, the question arises whether the tax-free amount for the first tax group should be defined at all.

“Currently, if a child receives a donation or an inheritance from parents, e.g. a car worth more than PLN 9,637 and forgets the obligation to submit information to the tax office within 6 months, unfortunately the value of this inheritance exceeding PLN 9,637 will be taxed. taxation and formalities related to the reporting of donations and inheritances should be abolished “- said Juszczyk.

Main photo source: Red_Baron / Shutterstock

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