Often a consideration is agreed upon in line with the gift that the donee is obliged to take care of the donor until the rest of his life – if necessary.
This obligation is condition precedent for the event of need of care. Consequently, the capital value is to be determined according to § 14 para. 1 Valuation Act: In the first step, the annual value of the care is multiplied by the capitalization rate based on the remaining life expectancy of the donor. In the second step, the result is multiplied by the discount rate of table 1 of § 12 para. 3 Valuation Act based on the chargeability of the transferred asset.
The aforementioned principles apply analogously to the valuation of liabilities of estate due to care-giving and the tax allowance of § 13 para. 1 no. 9 Inheritance and Gift Tax Act.