Intra-family succession against payment and without payment
Workshop by Alexandra Hirt on the occasion of the ISIS) seminar on November 16, 2022 entitled "Tax Aspects of Business Succession".
Case 1: Succession during lifetime
1. facts of the case
Max Muster is a successful entrepreneur. He is the sole shareholder of several companies. In view of his retirement, Max Muster is considering how to structure his succession. He has not yet decided whether to transfer his companies to his daughter or choose a solution outside the family.
Max Muster wonders whether he should restructure his group of companies. The future structure should be optimal from a tax point of view and also bring advantages in terms of succession.
In the context of succession planning, various structuring options are to be examined. These are to be assessed from a legal and tax perspective.
- Retention of the previous structure:
a. What are advantages for business succession?
b. What are disadvantages for business succession?
- Restructuring with holding company:
a. What are the legal aspects to be considered when establishing the holding company?
b. What are the tax aspects to be considered when establishing the holding company?
c. What are advantages for business succession?
d. What are disadvantages for business succession?
- Lifetime gift to the daughter:
a. What tax aspects must be taken into account in the case of a gift of the companies to the daughter?
b. How is a particularly favorable purchase price assessed under tax law?
c. What inheritance law aspects must be taken into account when making a lifetime gift to the daughter?
- Succession Planning via Heir Holding:
a. How is succession planning carried out via an inheritance holding company?
b. What has to be considered from a tax point of view in the case of an inheritance holding company?
Case 2: Death of an entrepreneur
1. facts of the case
Until his death, the decedent is engaged in business as follows:
a) as a sole proprietor;
b) in a partnership;
c) through his corporation (Aktiengesellschaft).
He is survived by his wife and two children. There is neither a will nor an inheritance contract. There are hidden reserves on the business assets.
What are the tax consequences of probate?
a) Sole proprietorship;
c) Corporation (joint stock company).