A married couple have held 51% and 49%, respectively, of the shares in a holding company since 1986. No community of property exists between them. After the husband's death in 2016, the wife acquires his 51% package. From then on, she holds 100% of the shares. A legal demerger follows in 2020, whereby part of the assets are split off to a newly established private limited company. On the same day, the wife donates all the shares in this new private limited company to her daughter.
BOR
The daughter invokes the BOR for the entire shareholding. The inspector partially rejects this. He applies the BOR only to 49% of the shares, as mother had not yet owned the remaining 51% for five years at the time of the donation. The daughter argues that the law does not require that the entire donated package must have been held for five years. She also invokes the purpose and scope of the BOR: after all, mother acquired the 51% under inheritance law from father, who himself held the shares for decades.
Property requirement
The court ruled that the text of the law was clear. It requires the donor to have held the gifted shares continuously for five years prior to the gift. Mother meets this requirement for the 49% package she has held since 1986, but not for the 51% she only acquired in 2017. Therefore, the BOR only applies to 49% of the gift. The court does not reach an interpretation according to the purpose and scope of the BOR, as the legal text leaves no room for doubt. Although the Implementation Regulation on gift and inheritance tax provides for exceptions to the possession requirement, it does not provide for a situation like this where the donor acquires shares under inheritance law within five years prior to the gift.