What is a shared gift and who pays the gift tax?
Usually, a gift is given to each recipient separately. However, in some cases, donors may wish to have two or more people share the ownership of a gift, so they specify the gift as shared. One way to do this is to draw up a deed of gift stating that the gift is a shared gift.
When a gift is shared, all recipients carry joint responsibility for gift tax.
How to report a shared gift
One of the recipients files a gift tax return on behalf of all the recipients. If there are several donors, file a separate gift tax return on every donor's share of the gift.
When the Tax Administration has finished processing the return, the person who filed it will receive a decision on gift tax assessment in MyTax and by post. It will also be sent to the other gift recipients. Bank transfer forms for paying the tax will be enclosed. They contain the total amount of gift tax, payable by all the recipients together.
Example: Antti gives his daughter Liisa and her husband Ville a shared gift. The deed of gift specifically states that the gift is a shared gift. Liisa and Ville will file only one return stating that they received the gift together and the donor wanted them to share the ownership. A joint tax, calculated on the total value of the gift, is imposed on Liisa and Ville and they carry joint responsibility for payment.
Gift tax returns can also be filed on a paper form.
How much tax must be paid on a shared gift
If a gift is intended to be shared by multiple recipients, the gift tax imposed is the joint responsibility of all the gift recipients.
The tax bracket will be that of the person whose family relation to the donor is the most distant. An exception from this rule is a situation where the recipients are married or in a registered partnership. In this case, tax is assessed under the bracket of the person whose family relation to the donor is the closest. Read more about the amount to pay and the applicable tax brackets
Example: Antti gives his daughter Liisa and her husband Ville a shared gift. The deed of gift specifically states that the gift is a shared gift. They must pay gift tax under bracket 1 and carry joint responsibility for payment.
However, if Liisa and Ville were not a married couple, the shared gift received from Antti would entail gift tax under bracket 2.