Field help:
Did you pay money to someone as a permanent burden?
Select Yes if you have made payments to a third person in the form of long-term financial burdens (dauernde Lasten).
Long-term financial burdens are regular monthly payments that can be adjusted in the amount at any time if the economic circumstances of the contracting parties change. The amount of the payment may, for example, be based on the profit of the transferred company.
Main case of an application for a transfer of assets as part of the anticipated succession. In this case, parents usually transfer assets (e.g. company shares) to their children during their lifetime. In return, the children undertake to pay a monthly annuity to the parents for life.
Important: The deductibility of long-term financial burdens depends on the date of the contract. Since 01.01.2008, the distinction between long-term financial burdens and annuities has been abolished. Annuities are now always "long-term financial burdens". This means that the calculation of the income share previously required for life annuities can be waived. This means that
- The recipient may deduct the pension benefits in full as special expenses (sect. 10 para. 1a no. 2 of the Income Tax Act (EStG).
- The provider of the benefits must pay tax on the full amount of the benefits as "other income" (sect. 22 no. 1a of the Income Tax Act (EStG).
