Gifting and Inheriting Crypto in Germany

German crypto content is overwhelmingly about section 23 of the Income Tax Act and the one-year rule. Gift and inheritance tax is a different statute, with different allowances and a different logic, and the interaction between the two is where the useful planning sits.

Two separate regimes

Income tax deals with what happens when you dispose of crypto. Gift and inheritance tax deals with the transfer of assets between people, whether during life or on death. They are governed by different law, they use different valuations, and one does not substitute for the other.

The key structural feature of the German gift and inheritance regime is that allowances depend on the relationship between the parties and refresh on a rolling basis, which is why lifetime transfers spread over time behave very differently from a single transfer on death. Confirm the current allowance amounts and the applicable period with your Finanzamt or a Steuerberater, since they are set by statute and change.

What makes the crypto case interesting

Recall how income tax treats a directly held coin: gains on disposal are a private disposal transaction under section 23, taxed at your personal rate of 0 to 45%, and tax free entirely after a holding period of more than twelve months.

Now consider what a gift is. It is not a sale, so the income tax question is different from the one a disposal raises. What matters for planning is what the recipient inherits along with the coins, particularly in relation to that twelve month clock, because the exemption is the most valuable thing in the German system and its continuity across a transfer is the whole question.

This is precisely the point to take advice on rather than infer, because the answer determines whether a transfer preserves or destroys an exemption that could be worth more than the gift tax itself.

Valuation

Whichever regime applies, a value must be fixed at the moment of transfer. For crypto that means recording the date, the units, the price source and the resulting euro value, at the time, rather than reconstructing it later. A gift with no contemporaneous valuation evidence is a dispute waiting to happen.

The inheritance case

Crypto held at death forms part of the estate, and the problems it causes are operational before they are legal:

• Discovery. Heirs cannot value what they do not know exists. An exchange account nobody mentions is still part of the estate.
• Access. Seed phrases and hardware wallets. This is the failure with no remedy, and it is the reason a crypto estate needs preparation the deceased has to do.
• Acquisition history. The heirs will eventually need the acquisition dates, because the one-year rule depends on them. Reconstructing a decedent's history across several venues is the expensive part.

Preparing this while alive costs an afternoon. Not preparing it can cost the whole holding.

What to do before transferring

1. Establish the euro value at the intended transfer date and keep the evidence.
2. Check the allowance position for the relationship involved and the rolling period, with a Steuerberater.
3. Establish what happens to the acquisition dates and the twelve month clock on the transfer, before you transfer rather than after.
4. Document the transfer on both sides, so the recipient can evidence acquisition years later.
5. For estate planning, write down where everything is and how to access it, separately from the tax question.

Our German crypto tax guide covers the income tax side that any later disposal will run through.

General information, not tax advice. Rules change and depend on your circumstances. Confirm the current position with the relevant tax authority or a qualified tax professional.