Usufruct is a proven tool for asset and succession planning in Germany. It allows assets to be transferred during the transferor’s lifetime, while the income remains with the transferor. This model, which many are familiar with in connection with real estate, can also be used for securities or cryptocurrencies – with tax advantages and a clear legal framework.
Transfer of assets from parents to children
In the classic case, parents transfer real estate to their children as a gift and retain the right to use it or receive rental income by reserving the right of usufruct. For tax purposes, this reservation reduces the value of the transferred assets by the capital value of the usufruct. This can significantly reduce the transfer value for tax purposes and make optimal use of personal allowances for gifts or inheritances.
Calculation of the usufruct value
Two factors are particularly important when calculating the value of usufruct: the expected annual income and the multiplier published by the German Federal Ministry of Finance, which depends on the age of the donor. Since the multiplier reflects statistical life expectancy, it is generally higher for women than for men.
An example:
A 53-year-old mother transfers a rented single-family home with a market value of EUR 850,000 to her daughter and reserves a lifelong usufruct right for herself, so that she continues to receive the annual rental income of EUR 30,000. For the tax assessment of the usufruct, the annual income is multiplied by the applicable multiplier. According to the current table of the Federal Ministry of Finance for 2025, the multiplier for a 53-year-old woman is 15.195.
The capital value of the usufruct right is therefore as follows: EUR 30,000 (annual income) x 15.195 (multiplier) = EUR 455,850.
The gift tax value of the property is thus reduced from EUR 850,000 by EUR 455,850 to EUR 394,150. Since the tax-free allowance for gifts to one’s own child is EUR 400,000 (applies every 10 years), the gift remains completely tax-free.
Usufruct also possible on securities
The basic principle can also be applied to securities, funds or cryptocurrencies. In this case, the assets are transferred to the beneficiaries, but the current income – such as dividends, interest, or staking rewards – continues to accrue to the usufructuary. Here, too, the valuation is based on the familiar formula: annual income multiplied by the relevant multiplier.
Here is an example: A 45-year-old father transfers a stock portfolio worth EUR 1.5 million to his daughter. The average annual dividend yield is 5 percent. The multiplier for a 45-year-old man is 15.741.
Annual income: 5 percent of EUR 1.5 million = EUR 75,000
Capital value of the usufruct: EUR 75,000 × 15.741 = EUR 1,180,575
Value of the gift: EUR 1,500,000 – EUR 1,180,575 = EUR 319,425
This gift of EUR 1.5 million would also remain completely tax-free, provided that the EUR 400,000 allowance can still be used.
However, it is important to note that not every credit institution can implement the granting of usufruct on securities accounts. It is therefore advisable to consult with the bank at an early stage to ensure correct implementation (custody account for the recipient of the gift with the securities, clearing account for the usufructuary to which the dividends are paid). We would be happy to recommend a bank that has experience with such arrangements.
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Cryptocurrencies as gifts subject to usufruct
Even with cryptocurrencies, it is possible to make a gift subject to usufruct if the cryptocurrencies generate income, e.g., from staking or lending. Here, too, it is important to ensure not only correct legal implementation, but also appropriate technical and administrative implementation. While the gifted crypto assets are transferred to a wallet belonging to the recipient, it must be ensured that the ongoing income flows into a separate wallet belonging to the usufructuary.
Tax optimization with usufruct as a secure instrument
Usufruct is a long-established, legally secure, simple, and effective instrument for transferring assets in Germany in a tax-efficient manner while continuing to benefit from the income. Careful legal and administrative implementation of the project ensures that the desired tax optimization effect actually occurs. We would be happy to assist you in this process.
