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Freigrenze vs. Freibetrag

English translation: turning the tax exemption threshold into a nil-rate band

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GLOSSARY ENTRY (DERIVED FROM QUESTION BELOW)
German term or phrase:die Freigrenze in einen Freibetrag umwandeln
English translation:turning the tax exemption threshold into a nil-rate band
Entered by: Catherine Winzer
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16:56 Dec 1, 2010
German to English translations [PRO]
Law/Patents - Law: Taxation & Customs
German term or phrase: Freigrenze vs. Freibetrag
As I understand it, if a Freigrenze is exceeded, tax must be paid on the entire amount, whereas if a Freibetrag is exceeded, tax is only paid on the excess amount.

I can't give too much context for reasons of confidentiality, but the situation is that a particular group is lobbying "mit dem Ziel, die Freigrenze in einen Freibetrag umzuwandeln" on a particular category of products.

Can anyone provide me with the correct terms in English?

TIA.
Catherine Winzer
Germany
Local time: 03:33
with the aim of turning the tax exemption threshold into a nil-rate band
Explanation:
with the aim of turning the tax exemption threshold into a nil-rate band

http://en.wikipedia.org/wiki/Nil_rate_band

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Note added at 42 mins (2010-12-01 17:39:17 GMT)
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Two terms in one question, so on the borderline of what is permissible in this forum...
For Freigrenze, see Linguee: http://www.linguee.com/english-german/search?sourceoverride=...
tax exempt(ion) limit/threshold

Re Freibetrag: 'nil-rate band' definitely works for the UK. Alternatively 'tax allowance'.

The scenario you describe here applies to UK stamp duty. That's why there are no houses on the market priced at between £250,000 and £275,000:
http://www.hmrc.gov.uk/sdlt/intro/rates-thresholds.htm
Selected response from:

Lancashireman
United Kingdom
Local time: 02:33
Grading comment
Thanks, everyone for your answers. Andrew's helped the most in my context, so I'm giving him the points.
4 KudoZ points were awarded for this answer

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Summary of answers provided
4 +2with the aim of turning the tax exemption threshold into a nil-rate bandLancashireman
4clawback threshold vs. tax-free allowancexxxAdrian MM.
3clawback threshold versus tax exemption limit
YorickJenkins


  

Answers


33 mins   confidence: Answerer confidence 4/5Answerer confidence 4/5 peer agreement (net): +2
mit dem Ziel, die Freigrenze in einen Freibetrag umzuwandeln
with the aim of turning the tax exemption threshold into a nil-rate band


Explanation:
with the aim of turning the tax exemption threshold into a nil-rate band

http://en.wikipedia.org/wiki/Nil_rate_band

--------------------------------------------------
Note added at 42 mins (2010-12-01 17:39:17 GMT)
--------------------------------------------------

Two terms in one question, so on the borderline of what is permissible in this forum...
For Freigrenze, see Linguee: http://www.linguee.com/english-german/search?sourceoverride=...
tax exempt(ion) limit/threshold

Re Freibetrag: 'nil-rate band' definitely works for the UK. Alternatively 'tax allowance'.

The scenario you describe here applies to UK stamp duty. That's why there are no houses on the market priced at between £250,000 and £275,000:
http://www.hmrc.gov.uk/sdlt/intro/rates-thresholds.htm

Lancashireman
United Kingdom
Local time: 02:33
Native speaker of: Native in EnglishEnglish
PRO pts in category: 26
Grading comment
Thanks, everyone for your answers. Andrew's helped the most in my context, so I'm giving him the points.

Peer comments on this answer (and responses from the answerer)
agree  philgoddard: What a well argued answer! And I never knew about the house prices thing.
32 mins
  -> One can argue until one is 'blue in the face' on this zite, but often to no avail.

agree  Ted Wozniak: tax-free allowance for a US audience
46 mins
  -> Thanks. I suspected that this solution might not travel too well.

neutral  xxxAdrian MM.: The UK IHT/Inheritance tax threshold is also known as the 'nil rate band'. Also that band is, notionally, taxed at 0%.//Not really. IMO the nil-rate band is another way of looking at the threshold which may trigger a clawback: stamp duty or not: IHT.
5 hrs
  -> I take it that you intended this comment as an 'agree' then? // Clear as mud, M'lud.

neutral  YorickJenkins: I think it is important to use the word "clawback"-threshold IMO does not per definition mean that exceeding it triggers liability backpayment on the mount below. I don't think the diofference between "nil rate band" and "threshold" is at all clear.
17 hrs
  -> Not only do I not think it is important to use the word "clawback"; I also believe it is wrong. Kindly argue your joint case lower down on the page. Thanks.
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7 hrs   confidence: Answerer confidence 4/5Answerer confidence 4/5
clawback threshold vs. tax-free allowance


Explanation:
In the UK, there are 2 types of tax threshold: for IHT/inheritance tax, the only the amount over the threshold is taxable vs. stamp duty - as in Andrew S.'s answer - where the threshold triggers a backward taxation of the whole amount. There's no distinction in the UK term of threshold for the former and latter whereas the Canadian tax system uses clawback for the latter.

Tax-free allowance is clearly a tax above a certain amount.

As mentioned, a nil-rate band in the UK is the same thing as e.g. an IHT threshold and means precisely that a nil rate multiplier: sounds daft, but if the band is taxed at a zero-rate, it qualifies for other exemptions and reliefs.


Example sentence(s):
  • Since the clawback threshold is indexed, it will probably be around $70000 when you reach 65.

    Reference: http://www.hmrc.gov.uk/rates/iht-thresholds.htm
    Reference: http://www.fundlibrary.com/features/rrsp/page.asp?id=13201
xxxAdrian MM.
Local time: 03:33
Specializes in field
Native speaker of: Native in EnglishEnglish
PRO pts in category: 111
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18 hrs   confidence: Answerer confidence 3/5Answerer confidence 3/5
clawback threshold versus tax exemption limit


Explanation:
Absolutely agree with tom thumb's "clawback threshold" assuming that questioner's interpretation of Freigrenze is right (which she can see from more context-it sounds reasonable). I prefer "tax exemption limit" to "tax free allowance" only because I think it is used more for personal tax liabilities whereas exemption sounds to me more appropriate for businesses, but that is just instinct..

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Note added at 1 Tag3 Stunden (2010-12-02 20:43:46 GMT)
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A "clawback threshold" I understand to be a point, which when overstepped, means not only that one has loses further entitlement to exemption but also that one must repay or is liable for the recovery and payment of previous entitlements. The example which springs to my mind is the VAT clawback threshold-if a service provider who is not charging VAT in one year because turnover is within the VAT exemption limit for small earners in that year, exceeds that threshold in the year be it at the end of December, then said trader is retrospectively liable for VAT on all services sold in that year, even though they were VAT exempt for most of the year. The passing of the threshold does not just refer to business beyond the threshold but to allk business (and a nasty shock that was when it happened to me in Germany years ago so I knwo the meaning of "clawback threshold" from very personal and bitter experience. Freigrenze does not have to refer to a retrospective rescinding of an allowance but the questioner specifically states that it does in the text she has (if Freigrenze is exceeded, then tax is retrospectively payable on the entire amount-I would call that a claw back". "Tax exemption threshold" does not necessarily or even normally, normally mean this, although it can do. As for "nil rate band", it is defined in Wikipedia thus: "The nil-rate band is the value of an estate that is not subject to Inheritance Tax in the United Kingdom" -in other words it is given as a special term relating to inheritance tax thresholds

YorickJenkins
Local time: 03:33
Native speaker of: Native in EnglishEnglish
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