Business Assets: Time to act for succession inter vivo (anticipated inheritance)
Estate Planning / Inheritance Law
In 2014, the Federal Constitutional Court decided that the tax benefit for business assets under the current IGT-Law violated the principle of equal treatment (1 BvL 21/12). The Court set a deadline until June 30, 2016 for new rules.
Political discussions are still ongoing. In all likelihood, SMEs will be affected by the new rules (as required by the Federal Constitutional Court). Under the current legislation businesses with up to 20 employees have been exempt from the duty to maintain their current payroll. For the future we expect that this duty will be extended to businesses with 3 or more employees (making it harder to adapt post succession).
As the deadline approaches, we expect uncertainty to grow. We recommend our clients to analyze succession questions at an early stage.