Donation of a company share subject to a reservation of usufruct

If the donor also reserves the voting right together with the usufruct, the donation of a company share is not favored as business assets.

As a rule, the donation of business assets is tax-privileged. However, a pitfall lurks in the case of a gift subject to the reservation of usufruct, as a brother and sister now had to discover at the Federal Fiscal Court. The parents had transferred KG shares to their children subject to usufruct and at the same time amended the partnership agreement in such a way that the voting rights for shares in the event of usufruct were to go to the usufructuary. In the opinion of the court, however, this meant that the children never became co-entrepreneurs because they were neither able to develop their own initiative nor did they bear any entrepreneurial risk. If one of these elements is missing altogether, there is no co-entrepreneurship and the tax concession for business assets does not apply. The ruling still applied to the old inheritance tax law, but can also be applied mutatis mutandis to the new law.