What happens to child investments if families leave Germany? Key aspects explained. Read more.
Many of the families we work with at ETF4Kids live internationally. A job abroad, a move back home, a new chapter – and suddenly one question comes up: what happens to the savings plan we built for our child once we leave Germany?
This question worries far more parents than it should. Search online and you quickly run into the term "exit taxation" (Wegzugsbesteuerung), which sounds alarming.
So let us start with the good news: for the vast majority of families with a normal child savings plan, leaving Germany is far less complicated than it first appears. You just need to know a few things – and plan ahead.
In most cases, yes. Your child's invested capital does not disappear simply because you move your residence abroad.
What changes is mainly who has the right to tax you. Once you move your tax residence abroad and become taxable there, Germany generally loses the right to tax your future investment gains.
From that point on, future gains are usually taxed in your new country of residence. What matters here is your tax residence, not your nationality.
Here is a practical issue that catches many expat families off guard: not every German broker will keep a plain securities account (Depot) open once the holder moves abroad. Some require a German or EU residence. This is a contractual issue, not a tax one – but it is exactly why the structure you choose matters.
At ETF4Kids, we mainly work with an ETF policy – the same broadly diversified ETFs, but held inside an insurance wrapper, with established German providers.
The key advantage for internationally mobile families: in many cases you can keep contributing to your plan even after you leave Germany, as long as you keep a German bank account for the monthly contributions.
Instead of having to liquidate or transfer everything when you move, the plan simply continues. For families who might return in a few years, or who expect to keep moving, that is a meaningful difference compared to a rigid depot solution where a provider change – or closure – can force your hand.
Whether this applies to your specific destination country, and what you need to arrange, is something we work through with you individually. And we will tell you honestly if there are limits in your case.
Exit taxation is a rule where the German tax authorities treat your investments as if you had sold them on the day you move away, and tax the gains accumulated up to that point – even though no sale took place.
The crucial point for most families: this rule generally does not apply to a normal child savings plan. Since 1 January 2025, exit taxation was extended to investment funds and ETFs for the first time – but only above clear thresholds.
It applies to fund holdings only if the acquisition cost of a single fund is at least 500,000 euros, or if you hold at least 1 percent of a fund's shares.
A typical child savings plan of 25, 50 or 100 euros per month sits orders of magnitude below that threshold. For the large majority of our families, exit taxation is simply not a concern.
It becomes relevant only in special cases – very large private portfolios, or assets held through a GmbH or holding structure. In those situations, early tax advice matters, ideally one to two years before the move.
A few points that have proven useful in practice when a move abroad is coming up:
Start early. Tax questions are far easier to structure before you leave than afterwards.
Keep a German bank account if you want to keep contributing to your plan.
Check the double taxation treaty between Germany and your destination country – it determines how your investment income will be taxed.
Know the reporting rules. Under the international exchange of information (CRS), accounts and portfolios are automatically reported between countries. Transparency is mandatory, not optional.
Document your deregistration date (Abmeldung) – it is the decisive date for tax purposes.
For most families, the picture is reassuring: your child's savings plan can survive a move abroad – and with the right structure, you can even keep contributing to it.
What changes is which country taxes your future gains, not whether your savings vanish.
We are not a tax firm at ETF4Kids. But we help you build your child's savings structure so that it also works for an international life. And we will tell you honestly when you also need a specialist tax adviser.
This article is general information and does not replace individual tax advice.
Do I have to close my child's savings plan when I leave Germany?
Generally no. The invested capital remains. With an ETF policy you can in many cases even keep contributing, as long as you keep a German bank account.
Does exit taxation apply to my ETF savings plan?
With a normal child savings plan, practically never. It only applies if the acquisition cost of a single fund is at least 500,000 euros, or if you hold at least 1 percent of a fund's shares.
Which country taxes my gains after the move?
Usually your new country of residence. What matters is your tax residence, not your nationality. The details are governed by the double taxation treaty between Germany and your destination country.
Do I need a tax adviser?
With a normal child savings plan, usually not. With large portfolios, company holdings or complex structures, absolutely – and early, ideally one to two years before the move.
A move abroad is a big step for any family – logistically, emotionally and financially. Your child's savings plan does not have to become part of the problem.
With the right structure it simply continues, while you focus on the things that really matter. You do not have to become a tax expert. You just need to know what counts – and ask in time.
That is exactly what we are here for.
About the author
Nabil Khan holds a Master of Science in Economics and is the founder of ETF4Kids, helping families and expats in Germany build structured, long-term wealth for their children. ETF4Kids GmbH is licensed as a financial investment broker (§34f GewO), insurance broker (§34d GewO) and real estate loan broker (§34i GewO) by the IHK Region Stuttgart.
and you want to know
how your child's savings plan can continue,
without stress and without nasty surprises,
it is worth gaining clarity first.
Because good decisions
do not come from rushing.
They come from understanding.
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