If you are a German tax resident planning to move abroad with a meaningful ETF portfolio, there is a 2025 change you need to understand before booking the removal van. Germany’s exit tax rules, known as Wegzugsbesteuerung, used to target almost entirely people who owned at least 1% of a company’s shares — founders, early employees with options, family business heirs. Diversified ETF investors were, in practice, left alone.
That changed. The rules now catch substantial holdings in investment funds too, including UCITS ETFs. The honest answer for most readers here: if your portfolio is a normal, diversified spread of MSCI World or S&P 500 trackers built through monthly investing, you are unlikely to be caught. This mostly targets people with a large, concentrated position in one fund — often built through a lump sum, an inheritance, or years of buying a single ticker. But “unlikely” is not “definitely fine,” and the thresholds are lower than you might assume once years of accumulation add up.
I am not a German tax adviser, and this area is genuinely new — guidance is still catching up. Treat what follows as a map of the terrain, not a substitute for a Steuerberater who handles cross-border moves. If you are anywhere near the numbers below, that conversation is not optional.
What changed in 2025
Section 6 of the Außensteuergesetz (AStG), Germany’s foreign tax act, has long triggered an exit tax when someone who had been German tax resident for a set number of years moved abroad while holding at least 1% of a corporation. Germany taxes the unrealised gain as if you had sold on your last day of residency, because it is about to lose the right to tax that gain once you leave. The 2025 change extends this deemed-disposal logic to fund holdings — the wrapper UCITS ETFs use — adding a second trigger based on acquisition cost that catches a much wider group, and it is this second trigger that matters most for typical ETF investors.
Methodology: the calculations in this guide apply our how we compute tax examples.
Who the new rules actually catch
Two separate tests can trigger the exit tax on a fund position, and only one needs to be met.
The 1% fund-stake test
If you hold at least 1% of the total units in issue of a single fund, that position can fall under the exit tax rules. For a large, liquid UCITS ETF with billions in assets this is hard to reach as a private investor, but becomes more realistic with smaller funds, or where a family has pooled holdings into one fund line.
The roughly €500,000 acquisition-cost test
This is the one that should get your attention. If your cumulative acquisition cost in a single fund — what you paid in, not current market value — crosses a threshold in the region of €500,000, that position can be treated as substantial, regardless of the percentage it represents. This is measured per fund (per ISIN), not across your whole portfolio. Someone with €1.2 million spread across four ETFs might sit under the threshold on every line, while someone with €600,000 concentrated in one accumulating World ETF could be squarely inside it. Treat the figure as illustrative — a Steuerberater must confirm the current interpretation before you rely on it.
What a deemed disposal actually costs you
If a position is caught, Germany treats you as having sold it at market value the day before you cease to be tax resident, taxing the unrealised gain even though you received no cash. That is the sting: a paper gain built over a decade of compounding can generate a real tax bill in the year you emigrate, with no sale to fund it. The table below sketches how this differs from the pre-2025 position.
| Feature | Pre-2025 rules | 2025-onward rules |
|---|---|---|
| Who could be caught | Owners of ≥1% of a company (shares only) | Same, plus fund holders meeting the 1% fund test or the ~€500k cost test |
| Typical diversified ETF investor | Unaffected | Unaffected unless concentrated in one fund above the threshold |
| Trigger event | Ceasing German tax residency | Same trigger, wider scope of assets |
| Deferral within EU/EEA | Historically available, conditions apply | Similar mechanism expected to extend to funds — confirm current terms with an adviser |
This table is a simplified sketch. The precise mechanics of deferral, instalments, and security requirements are technical and still being refined — do not plan a move around any single detail without professional confirmation.
The normal case: most people below the threshold just leave
The overwhelming majority of people moving out of Germany with an ETF portfolio will not trigger any of this. If you have been dollar-cost averaging into a couple of world or S&P 500 UCITS ETFs for years, your acquisition cost per fund is likely well under the threshold even if current market value looks impressive. In that ordinary case, moving abroad creates no German exit event on your ETFs. What still applies is your destination country’s tax regime, and Germany’s ongoing right to tax any German-source income you keep, such as a rental property there — separate questions worth a planning conversation with an adviser in both countries.
Planning angles if you are near the line
Check exposure fund by fund, not portfolio-wide
Because the acquisition-cost test applies per fund, the first practical step is adding up what you actually paid into each ISIN separately. A portfolio that looks large in total can still sit comfortably under the line on every position — a spreadsheet exercise you or your adviser can do before any talk of restructuring.
Spreading positions, timing, and deferral
Investors close to a threshold in one fund sometimes split future contributions between comparable funds rather than adding everything to one line — a legitimate diversification decision that may also keep positions under the threshold longer. It is not a way to retroactively fix an existing concentrated position, and restructuring purely to dodge a known tax rule needs a Steuerberater’s sign-off first. Separately, moves within the EU/EEA have historically had more accessible deferral mechanisms than moves further afield, so if your move date is flexible, the difference between crossing the threshold this year versus next, or an EU destination versus a non-EU one, can be worth a planning session before you give notice on your German lease.
Does the destination country change anything?
Yes. Deferral for the German exit tax has generally been more accessible within the EU/EEA than further afield, and separately, your new home country has its own rules for taxing investment gains that do not care what Germany does. If you are heading to Switzerland, I cover how Swiss wealth and income tax interact with a UCITS portfolio in a companion piece on moving to Switzerland with an ETF portfolio. From the opposite direction, I have written up moving to Germany with an existing ETF portfolio separately.
Browse the full series in our European ETF tax pillar.
Your broker matters too, since staying with a pan-European broker can make an international move far smoother than closing one account and opening another — see my guide to using Interactive Brokers as an expat, or my comparison of brokers for German investors if you are still choosing one. Use our capital gains tax comparator for a rough sense of how your destination would tax the same gains going forward.
My verdict: what I would actually do
If your ETF holdings are diversified across several funds and your acquisition cost in any single one is nowhere near the €500,000 region, I would not lose sleep over this reform — note the rule exists and move on with normal life planning. If you have a large, concentrated position in one fund, built through a lump sum, an inheritance, or years of buying a single ticker without diversifying, this deserves a proper conversation with a Steuerberater before you set a moving date, not after — trivial in cost next to a deemed-disposal bill on a position you never actually sold. I would also resist restructuring a portfolio purely to dodge a tax rule at the last minute; rushed changes made under time pressure create new problems, and any restructuring should make sense as an investment decision first, tax second.
For the underlying law rather than commentary, the Section 6 AStG framework sits with Germany’s Federal Ministry of Finance (BMF), and general international-taxpayer information is published by the Federal Central Tax Office (BZSt). Neither publishes a plain-English summary for retail ETF investors, which is exactly why a Steuerberater who reads the current guidance is worth the fee here.
Frequently asked questions
Q: Does the German exit tax apply to a normal MSCI World ETF savings plan?
A: In almost all cases, no. The rule targets substantial single-fund positions above roughly €500,000 in acquisition cost or a 1% fund stake. A typical monthly savings plan into a diversified ETF rarely approaches either threshold, though it is worth checking your actual numbers per fund rather than assuming.
Q: Is the threshold based on current market value or what I originally paid?
A: The relevant figure is acquisition cost — the cumulative amount you actually invested — not current market value. A position that has grown a lot from a modest original investment is less likely to trigger the test than one where you contributed close to the threshold amount.
Q: Does moving within the EU avoid the exit tax entirely?
A: No, but it has traditionally offered more favourable deferral treatment than a move outside the EU/EEA. The exit event can still occur; what differs is whether you can defer payment rather than face an immediate cash liability. Confirm the current mechanics with a Steuerberater before assuming any specific deferral applies to you.
Q: Can I avoid this by splitting one large ETF position into several funds before I move?
A: Spreading new contributions across comparable funds is a reasonable diversification step that may help keep positions under the threshold, but restructuring an existing large position purely to sidestep a known rule right before departure needs professional advice, both for its tax treatment and for whether it achieves anything at all.
Q: What happens to my German broker account once I move abroad?
A: That depends on the broker and your destination, and is separate from the exit tax itself. Some brokers operating across the EU can keep an account open with updated tax residency on file; others require a move to a local entity or a different broker. Check this before your move date so you are not scrambling mid-relocation.
Q: Where can I find the official rules rather than relying on articles like this one?
A: The underlying law is Section 6 of the Außensteuergesetz, with administrative guidance issued by Germany’s Federal Ministry of Finance. Because this area is new and still being clarified, the safest path is a Steuerberater who pulls the current BMF guidance for your specific situation rather than relying on any single article, including this one.
This guide is part of our guide to moving countries with an ETF portfolio — browse the full cluster for related situations.
European UCITS/ETF investor with 11+ years building a global dividend and index portfolio, and founder of Financial Expert Class. I write every guide here from first-hand experience investing across EU brokers and tax regimes — not theory. More about me →