How to file a gift tax return?
Gift recipients must file a gift tax return for gifts worth €5,000 or more. This also concerns gifts received from the same donor during a three-year period if their value reaches €5,000 or goes above it.
When to file a gift tax return?
Recipients must file it within three months of receiving the gift. The following circumstances make filing a gift tax return mandatory:
- You are the recipient of a gift worth €5,000 (€4,000 before 1.1.2017) or more.
- You have received gifts from the same donor during a three-year period; total value is €5,000 (€4,000 before 1.1.2017) or more.
Delivering the gift tax return to the Tax Administration
File a gift tax return in MyTax (tax.fi/mytax).
If you file a gift tax return or information relating to a gift tax return late, you may be required to pay a late-filing penalty or punitive tax increase.
How to file online
If you are a gift recipient, you are expected to log on to MyTax with your e-bank codes and complete the return during the session. The e-Service will guide you step by step.
Similarly, it lets you the return as unfinished and continue filing later. You are free to continue editing your input until such time as the Tax Administration starts processing the return. If necessary, the Tax Administration might ask you to provide further details at a later stage.
When the Tax Administration has finished processing the return and assessed the tax you must pay, the demand note is displayed in MyTax. It will additionally be sent to you by post. MyTax also has a feature for paying the tax.
Watch the videoclip to learn more about e-filing (www.youtube.com).
Please note if you need to file on behalf of a child (or on someone else's behalf who is not a child); it is not possible in MyTax unless he or she has a set of e-bank identifiers. However, you can file a gift tax return on behalf of a child on paper.
You can still send us your gift tax return on paper if necessary. Examples of circumstances where the paper form should be used:
- You are the gift recipient, but you don't have e-bank security codes
- Your child is the recipient, and he or she does not have the codes
- You are completing the return on behalf of someone else.
Send the paper form to:
Finnish Tax Administration
Inheritance and Gift Tax (Perintö- ja lahjaverotus)
PO Box 760
You also have the option to deliver the return to a tax office in person.
- Download Gift Tax Return paper form (form 3602e)
Recipient is a child under 18
If the recipient of a gift is a child younger than 18 years of age, the parent or guardian must file the return. In situations where parents donate assets to their children it may be required that a court of law appoint a legal counsel to protect the children's' interests.
Multiple donors or recipients
If two or more people have given you assets as gifts, use a separate gift tax return form to show each donor. Separate return forms must be completed even if the gift were documented on just one deed.
If recipients are more than one, each one of them must file their separate gift tax returns. If the gift asset is intended as a shared asset, the recipients only file one return. Gifts are treated as shared only if the deed (a deed of gift, a gift certificate etc.) expressly states that the asset is intended to be received as a shared gift. More information on shared gifts
No need to present the deed of gift to the Tax Administration
Although it is normally not required that taxpayers enclose gift certificates or deeds with the tax return, you must have a deed of gift drafted (although you don't have to submit to the tax office) if:
- The gift is real estate or a building. A public purchase witness must confirm the transfer of title to the gift recipient in the same way as when a house or other real estate has been sold.
More information on public purchase witnessing on the website of National Land Survey (www.maanmittauslaitos.fi).
The donor of the gift keeps the right or possession, usufruct or other similar rights with regard to the asset being the gift.
The guidance on how to fill out the gift tax return form contains a list of the circumstances that make it mandatory to enclose documentation with a gift tax return.
To file a tax return on a tax-exempt gift may be a good idea
If the total value of the gift or gifts stays below the tax threshold, you don't have to file the return unless the Tax Administration expressly prompts you to do so. However, sometimes it is advisable that taxpayers file a return also when a smaller gift has been received. If the taxpayer were to sell the asset later, they could then deduct the confirmed gift-tax value of the asset from its selling price (instead of deducting an acquisition cost), and thus pay less capital gains tax.
Gift tax value of the asset in capital-gains tax
If the Tax Administration has not confirmed the tax value of the asset earlier, the computation of capital gains will depend on a presumed acquisition cost based entirely on the length of time the seller has held the asset — either 20% or 40% of its selling price. When you sell the asset later, you may have an advantage if a confirmed tax value exists. The presumed acquisition cost may turn out to be a smaller amount, and therefore creates higher capital-gains taxes for you, the seller. If gift tax returns are submitted and tax values thus confirmed in advance, this will often be a benefit for the seller even if the value of the gift itself were below €5,000 (and no gift tax were assessed for it).
If you receive corporate stock as a gift and the shares are stock-exchange listed, the gift value may acceptably be the stock quote effective on the date of the gift instead of a confirmed value for purposes of gift taxation. This means that if the value stays below €5,000 you don't have to file a gift tax return unless you receive other gifts from the same donor and the total value goes over the 5,000-euro threshold within three years.