Loan to pay German gift tax

BlueImpala

Hello! 
My wife and I live in the UK, but I was recently gifted part of a flat by an elderly relative in Germany. She is still alive (and living in the flat) but wanted to have this sorted out before her health deteriorates further.

Because of the way gift/inheritance tax works in Germany, this makes me subject to paying gift tax on the value of this gift, which comes to about 43,000 Euro, which I now have to pay within two months. Needless to say, we don't have this kind of money lying around. What options would there be to get a loan for this in the UK? Since we are not resident in Germany, I assume it would not be possible to get a loan there?

We have a mortgage on a house we bought last year and a very good credit score. Our income has gone up a bit since we got the mortgage, but we would struggle to pay off an additional loan like this over 5-7 years. 

Many thanks!

Sncjw

43 grand loan is alot even on a decent income it will be hard to get that amount in a loan. 

Sandtree

BlueImpala said:

We have a mortgage on a house we bought last year and a very good credit score. Our income has gone up a bit since we got the mortgage, but we would struggle to pay off an additional loan like this over 5-7 years. 

What LTV did you have?

pramsay13

I think you will struggle to get an unsecured loan for that amount. 

How about a mortgage on the flat in Germany?

Alternatively you could evict the elderly relative and sell the house to pay the tax bill. 

Edi81

Can you decline the gift?
sounds as though this should have been discussed earlier although but hindsight is always wonderful. 

SusieT

You will not get a mortgage in Germany (I know someone there who found it very difficult, and they had lived there for a long time) as you are non resident and also have no German income.  It would be best to either remortgage the property that you have over say 10 or 15 years, or try to get some smaller loans to that vale through family members, with the intention of either selling the property when the relative passes away, since from the wording of the post it sounds as if they are putting their affairs in order and sounding as if they expect their health to deteriorate in the near future.
There may also be costs for a solicitor and to register the property in your name, so worth asking about those as well.
.

penners324

Get your elderly relative to pay it or decline the gift.

bris

Is there a reason the elderly relative is gifting the flat whilst still alive? These thing tend to happen when there is a chance they might need to go into care soon.

If in care then the house is used to pay for it, trying to evade it is pretty obvious, unless at least 7 years have passed.

Thats the UK position not sure how it works in Germany although it will be about the same.

Thrugelmir

Perhaps the OP could return , provide some more information or an update. 

SusieT

bris said:

Is there a reason the elderly relative is gifting the flat whilst still alive? These thing tend to happen when there is a chance they might need to go into care soon.

If in care then the house is used to pay for it, trying to evade it is pretty obvious, unless at least 7 years have passed.

Thats the UK position not sure how it works in Germany although it will be about the same.

One thing I know from living in Germany for a while is that people there have to have health insurance that includes care homes, so I think the system is very different to here.