Generationsskifte med skattemæssig succession i levende live og ved død

Morten Riis & Linda Myrhøj Nielsen

Student thesis: Master thesis


Many Danish owners of small and medium-sized enterprises will be facing the challenge of their lives in the coming years - are planning and implementing a succession process. Previous studies showed that many of these enterprises are not continued because companies have been required, in connection with tax succession, to transfer at least 15% of the voting power inter vivos, whereas there was a requirement for transfer of at least 1% of the share capital in the case of death. This meant a higher cash flow burden in the case of an inter vivos transfer than in the case of death. Moreover, it involved a challenge to the parties in connection with a partial transfer as the above requirement was also to be met in order for the transfer to be effected with tax succession. With the passing of Act No 532 of 17 June 2008, which came into force on 1 January 2009, an attempt has been made to harmonise the rules for succession process with tax succession inter vivos or in the case of death. In light of this as well as the complexity of the legislation, we have decided in this Thesis to describe and analyse the legislation governing a succession process with tax succession and compare it to what is practicable and which considerations should be made in connection with a succession process. For this purpose, we use as a basis case enterprises operated as a sole proprietorship and as a company, respectively, as well as the tax implications if these are passed on by succession to connected parties. The main problem of the Thesis is: How is a succession process involving transfer with tax succession realised inter vivos and in the case of death? Before a succession process can take place, the enterprise must be valued, and it is not irrelevant who the transferee is as various circulars apply for tax succession depending on the group of persons involved and whether the transfer is inter vivos or in case of death. The decision made by the Danish National Tax Tribunal in the case TfS 2008, 1429 LSR implies that deferred tax may be deducted in the valuation. This results in a conflict between this decision and section 33 D of the Danish Tax at Source Act/section 13 A of the Danish Estate and Gift Tax Act as to whether deferred tax may be deducted in the valuation while, at the same time, a liability is set off in the basis of calculation of the gift tax/estate tax. At this time, this has not been established in practice. If this is not acceptable, it should be considered whether the rates for liability items should be changed so as to reflect the current income and interest level development, which is not the case at present. In our opinion, the rules for succession process with tax succession inter vivos and in the case of death have been harmonised, but some elements of the legislation remain inexpedient; for example, a greater burden, financially and in terms of taxes, is imposed on close co-workers in connection with a transfer inter vivos than in the case of death.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
Publication date2009
Number of pages190