In the case of a wealth/salary gap between spouses, the property settlement swing offers the possibility of transferring assets to the ‘poorer’ spouse independently of the gift tax allowance (500,000 EUR). If gifts have been made between the spouses without their knowledge in the past (e.g. by making payments into a joint account), this can often be corrected retroactively by means of a property regime swap.
Prerequisite: community of accrued gains
The prerequisite for this is that the spouses live in ‘community of accrued gains’. This property regime applies unless otherwise agreed in the marriage contract. In the case of community of accrued gains, there is no joint property; instead, the assets remain separate.
Marital gifts
If assets are transferred between spouses without consideration, these are generally deemed to be gifts. If the tax-free allowances are exceeded (€500,000 every 10 years), gift tax is due.
Gift tax-exempt equalisation of accrued gains
By law, the claim for equalisation of accrued gains arises in the event of a lifetime termination of the community of accrued gains (divorce or marriage contract). To calculate this, the court determines how much wealth each spouse has acquired during the marriage. The respective initial wealth (marriage) and the respective final wealth (termination of the matrimonial property regime) are compared. The person who has acquired more must give up half of the difference. This claim for equalisation of accrued gains is not subject to gift or inheritance tax.
How a marital property swing works
This gift tax exemption is utilised in the case of a property settlement swing. The community of accrued gains is ended by agreeing a different property regime (separation of property) in a notarised marriage contract. The marriage continues, only the property regime changes, triggering the claim. You can then switch back to the community of accrued gains in order to trigger the equalisation of accrued gains again in the future if necessary. The term ‘property switching’ has been coined because of this ‘back and forth’.
Advantages over a gift
Gifts trigger gift tax if gifts made within a period of 10 years exceed the tax-free amount (EUR 500,000). The advantage of a property swing is that equalisation of accrued gains does not consume the gift tax-free amount.
Inclusion of real estate or participations
The equalisation of gains can also be fulfilled by the contribution of real estate or corporate assets corresponding to the value. If (only) the jointly occupied property (tax-exempt ‘family home’) is to be transferred, the classic gift is usually the preferred arrangement. In any case, the tax consequences (in particular the tax values) must be examined in advance.
How a marital property swing works
The marital property regime is changed by a notarised marriage contract, which terminates the marital property regime of the community of accrued gains. If, after the equalisation of accrued gains, the marital property regime of the community of accrued gains is ‘swinged back’, this is also done by notarised contract. To avoid the tax office assuming tax evasion, there should be a certain time lag between the two contracts.
Costs / benefits
The disadvantage of a marital property swap lies in its considerable costs. The notary’s fee is calculated based on the assets of both spouses. Added to this are the costs of tax and legal advice. Often, a marital property swap is dismissed prematurely due to the high costs. However, the tax advantage can far exceed the costs, especially in the case of a large gap between assets and income.
Instrument of tax-optimised succession planning
As a result of the equalisation of accrued gains, the ‘poorer’ spouse receives assets that he or she could then also transfer to the children. Thus, the children’s tax-free allowances (EUR 400,000 per child for each parent) can also be used for the ‘poorer’ parent.
Reduction of compulsory portion
The marital property swing can also reduce third-party claims to a compulsory portion. Usually, a gift between spouses does not lead to any reduction, since such a gift must be taken into account in the context of the claim to a compulsory portion supplement. By contrast, equalisation of accrued gains does not legally constitute a ‘gift’ and is therefore generally ‘protected’ from claims to a compulsory portion.
Lapse of gift tax already incurred
The marital property swing is an important tool for repairing unconscious gifts between spouses. The background to this is that spouses often unconsciously make gifts to each other that can lead to a considerable gift tax. If the tax office has not been informed about gifts exceeding the tax-free allowance, the tax office may even assume (attempted) tax evasion. Typically, such unconscious gifts occur in particular when the (significantly higher) salary or unilateral deposits of one spouse flow into a joint account or when real estate is purchased jointly but paid for by only one spouse. Since previous gifts between spouses are generally offset against the equalisation of accrued gains, this can lead to the cancellation of any gift tax that may have been triggered before in terms of gift tax. Nevertheless, in these cases, we advise in addition to file a (punishment-exempt) voluntary disclosure. Under no circumstances should you contact the tax office without prior consultation, as this may negate the desired punishment-exempting effect of the voluntary disclosure.
Conclusion
Marital property switching is an important instrument for tax-optimised asset succession and for repairing unintentional gifts between spouses. Due to numerous pitfalls, it is essential to seek advice from an experienced consultant.
We would be happy to advise you on your questions regarding marital property switching and assist you with asset transfers within the family, including tax assessment and preparation of tax returns.
Your ACCONSIS contact

Nicolai Utz
Lawyer
Specialist lawyer for inheritance law
Authorised signatory for ACCONSIS
Service phone
+49 89 547143
or via email
n.utz@acconsis.de