Is your family business benefitting from the tax reduction incentive on intra-family donations of company shares and business property?
The Duty On Donations of Marketing Securities And Immovable Property Used For Business (Exemption) Order, enacted in 2017, saw the introduction of an incentive scheme for family businesses, whereby donations of marketable securities and business property used in a family business would be subject to a reduced duty rate of 1.5%, from the standard 2% or 5%. This incentive will expire 30 September 2018, so we encourage family businesses to get in touch to find out more about how to avail of the reduced duty incentive.
The preferred duty rate of 1.5% can be applied on the transfer of properties used for conducting business activities and which has been used for commercial purposes for the last three years or more. It can also be applied for intra-family donations of company shares and other types of marketable securities
Qualifying family members include one’s spouse, descendants and ascendants in the direct line as well as their relative spouses. In the absence of descendants, donations to brothers or sisters and their descendants is permissible.
Those choosing to take advantage of this benefit must hold on to the marketable securities for a period of at least three years after the donation. Likewise, the immovable property must not only be retained by the donee but also continue to be used within a business.
How can we help?
Grant Thornton can help the individual transferring the business property with the preparation of the report, required by the notary publishing the deed of such transfer, giving assurance that the business property being transferred by gratuitous title has been used in a family business as defined in the Family Business Act for a period of at least three years preceding the transfer.
By engaging with our team of professionals providing business and tax advisory services, you can be confident that our team of experts will work with you to assist with your family business planning requirements. We believe that succession planning is an ongoing process that includes critical decisions as well as careful planning and preparation in order to successfully transition ownership, leadership and management of the business and the family's assets to successive generations.