Succession of the company / Donation of company shares
August 14, 2011 | 75,00 EUR | answered by Oliver Burchardt
I have a stock corporation (My share 99%) in Germany and shares in a Slovakian k.s. (treated by the German tax authorities as a partnership)
- If I gift shares in the AG to my children, how will the value of the gift be assessed? (Profit approx. EUR 70k p.a., business assets approx. EUR 400k, of which 80% are securities & cash)
- If I gift shares in the Slovakian k.s. to my children, how will the value of the gift be assessed? (My share of profit approx. EUR 80k p.a., My share of business assets at the beginning of the year always approx. EUR 5k, at the end of the year approx. EUR 100k, as all profit is distributed)
Dear inquirer,
Thank you for your inquiry, which I will be happy to answer as part of an initial consultation.
Please note that the tax assessment is based on the information provided. Changing, adding, or omitting information can potentially have a significant impact on the results.
The valuation of shares in non-listed companies and interests in partnerships is carried out using the so-called earnings value method. This method aims to determine a standardized profit of the company and evaluates the value of the shares based on this. Adjustments and deductions may be necessary to determine the standardized profit.
Since you naturally cannot provide such information on a platform like this, I assume for an initial, albeit indicative valuation, that the profits you mentioned do not require any further adjustments (this is unlikely to be the case, as tax adjustments are mandatory).
A capitalization factor published by the Ministry of Finance is applied to the sustainable profit. For 2011, this factor is 12.6103.
Therefore, the AG is to be valued at €882,712, and the k.s. at €1,008,824.
Please note that this valuation can only provide an initial overview, as the assumptions I have made may not apply in practice. I recommend seeking comprehensive tax advice before making any gifts, especially regarding whether there are any opportunities for tax planning in your case.
I am available for such consultations, deducting the amount paid here, using the contact information provided in my profile.
Best regards,
Oliver Burchardt
Tax advisor
