Dissolved Real Estate Partnership - New Shareholder - Transfer of Shares - GESt
January 7, 2014 | 50,00 EUR | answered by Peter Lipp
Extinct Real Estate Partnership - new partner - transfer of 94.9% shares
Father and son have a real estate partnership, father dies, shares pass to son (100%), the partnership is to be continued with a new partner (not a relative), but is it automatically extinct after the father's death?
Therefore, must a new partnership be established and the property be contributed? It is intended that 94.9% of the partnership shares be transferred to the new partner and the partnership be continued with these shares permanently, at least for 2-3 years. Will property transfer tax be due, if so, how much, is there another way in which no tax is due?
Dear clients,
the transfer of shares through inheritance does not establish a new partnership. The existing one remains with changed ownership interests. Therefore, there is no need to establish a new partnership.
When determining whether a real estate transfer tax liability exists, a 5-year period must be taken into account. During this period, no more than 95% of the shares may have changed ownership. Inheritance is not considered in this calculation. Therefore, if there have been no additional share transfers within the five-year period, no real estate transfer tax is due for a transfer of shares below 95%. However, if additional shares are transferred after 2-3 years, the entire transaction becomes subject to tax.
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