What gift tax liability will Mark incur on a €400,000 gift from his father if he has received no prior gifts?

To understand the gift tax liability Mark will incur on a €400,000 gift from his father, it's important to first recognize that gift tax is generally calculated based on the fair market value of the gift received, minus any allowable exemptions or reliefs.

In this scenario, gifting €400,000 exceeds the standard tax-free threshold, which means Mark will be liable for taxes on the amount over this threshold. In many jurisdictions, including various European countries, there is a lifetime gifting allowance or an annual exemption amount that does not incur tax. If Mark has received no prior gifts, he will use the applicable thresholds.

Given that the correct answer is a specific amount, it has likely been derived from applying the established tax rates and allowances relevant to the gift tax in Mark's jurisdiction. The calculations would typically involve determining the amount subject to tax (in this case, €400,000 minus the threshold) and then applying the relevant tax rate.

By arriving at a liability of €20,460, it indicates that either a large portion of the gift fell under the exemption limit, or the tax rate on the amount above the threshold was calculated accordingly. This demonstrates a solid understanding of how to compute gift tax liabilities based on the applicable laws and exemption limits.