inheritance
November 23, 2009 | 25,00 EUR | answered by Matthias Wander
The shareholders of a Soc.Limitada (Company A) based and managed in Portugal are also subject to unlimited taxation in Portugal. The purpose of Company A is the administration of assets, investment in real estate and holdings.
Company A is the controlling shareholder of an investment GmbH (Company B) located in Germany, which also invests in real estate and holdings.
Company A is not dissolved by the death of a shareholder.
Question: If a shareholder of Company A passes away, does this result in the assessment of German inheritance tax with regard to the assets (real estate, holdings) located in Company B in Germany?
Dear inquirer,
Thank you for your inquiry, which I would like to answer based on your information in the context of an initial consultation as follows:
The Portuguese company sociedade limitada is comparable to the German GmbH. Company A is therefore a corporation (legal entity) that can hold assets itself.
When a shareholder of the sociedade limitada passes away, only the shares in the foreign corporation are transferred. The assets of the company, including the Investment GmbH, are not transferred. They remain with the sociedade limitada. The death of a shareholder of Company A would have no impact on the assets of Company B and would also not trigger any inheritance tax consequences in Germany.
This would only be the case if either limited or unlimited tax liability exists. Limited tax liability exists if Company A is domiciled or has its place of management in the country. Unlimited tax liability exists if the deceased or the heir have their residence or habitual abode in Germany.
If this is the case, the heir would have to subject the transferred shares of Company A to inheritance tax in Germany.
I hope this gives you an initial overview.
Best regards,
Wander
Tax consultant
