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Gift tax: Lump-sum settlement in the marriage contract

 

Prof. Dr. Christian Zwirner, Anna Günther
07/10/2025
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In its ruling of April 9, 2025 (II R 48/21), the Federal Finance Court decided that a lump-sum settlement for waiving post-marital claims is subject to gift tax if it is agreed and paid before the marriage. In this context, the destinction from so-called need-based settlements must be taken into account: These are also agreed upon before the marriage, but are subject to a condition precedent and only become due when the marriage actually ends - need-based settlements therefore remain tax-free.

Background:
According to Section 7 (1) No. 1 of the German Gift Tax Act (ErbStG), any generous gift between living persons that enriches the recipient at the expense of the donor is subject to gift tax. A consideration is only taken into account if it has actually been incurred, is legally enforceable, and can be valued in monetary terms.

According to Section 7 (3) ErbStG, consideration that cannot be estimated in monetary terms is not taken into account when determining enrichment. In earlier decisions (BFH ruling of October 17, 2007, Ref. II R 53/05; BFH ruling of September 1, 2021, ref. II R 40/19), the BFH had already clarified that the waiver of possible future claims for equalization of gains or maintenance does not constitute consideration within the meaning of gift tax law.


Facts of the case:
The plaintiff concluded a notarized marriage contract with his future wife prior to the marriage. Among other things, this contract stipulated the matrimonial property regime of community of accrued gains. However, this was excluded for all cases of termination of the marriage—except in the event of the plaintiff's death—and limited in terms of amount. The marriage contract also waived pension rights equalization, post-marital maintenance, and division of household goods.

As compensation, the plaintiff undertook to transfer a plot of land worth at least €6 million to his wife. The transfer of the property took place after the marriage as agreed, whereupon the tax office assessed gift tax of around €830,000. The plaintiff appealed against this, arguing that the transfer of the property was not a gift, but consideration for his wife's waivers under the marriage contract. Without this compensation payment, the marriage contract would have been unconscionable. The lawsuit filed after the unsuccessful appeal proceedings was also unsuccessful before the Hamburg Fiscal Court (Ref. 3 K 136/19). Finally, an appeal was lodged with the Federal Fiscal Court (BFH).

 

Decision of the BFH:
The BFH rejected the appeal and confirmed the tax office's opinion. In its reasoning, the BFH clarified that the waiver of future post-marital claims does not constitute legally relevant consideration within the meaning of gift tax law. This is because such claims – such as equalization of gains or maintenance – would arise at the earliest upon termination of the marriage and are neither certain nor quantifiable in advance. Since the plaintiff ultimately transferred the property in question without consideration, this constituted a generous gift pursuant to Section 7 (1) No. 1 ErbStG. This was not contradicted by § 7 (3) ErbStG, as the waived claims could not be reliably valued in monetary terms.

Any possible error on the part of the plaintiff that he was obliged to transfer the property is irrelevant in the opinion of the BFH. The BFH also rejected constitutional concerns and found that neither the principle of equality under Article 3 of the Basic Law (GG) with regard to actual claims for equalization of gains nor the protection of marriage and family under Article 6 (1) GG would preclude the gift tax liability in the present case. The constitutional review did not reveal any regulatory gaps or distortions that would justify an exemption from tax liability – gift tax applies to all generous gifts regardless of family status.

 

Practical relevance:
With this ruling, the Federal Fiscal Court confirms its previous case law and emphasizes the difference between a lump-sum settlement and a needs-based settlement, which is particularly relevant for tax assessment.

In the case of a lump-sum settlement, the compensatory transfer of assets takes place in advance and without the fulfillment of a certain condition. This regularly results in gift tax being payable. In contrast to this is the need-based settlement, which is contractually stipulated in the marriage contract. However, the entitlement only arises upon termination of the marriage, so that there is no immediate gratuitous gift. Consequently, no gift tax is usually payable on need-based settlements.

 

Conclusion:
The present BFH ruling makes it clear that marriage contracts with settlement provisions require careful drafting. A tax review before concluding the contract provides clarity and helps to avoid unnecessary gift tax.