The value for gift tax of a limited partnership share which is gratuitously transferred to a related party may be calculated by using the capitalized earnings value method in order to determine the "sustainably achievable annual yield" and to correct one-time expenses. In these circumstances, the expense of a fine imposed for an antitrust violation must be added back to the relevant baseline profit, the Supreme Tax Court said in a most recently published decision.
In a most recent judgment, the Supreme Tax Court held a free gift to be subject to gift tax where the wife, before the marriage and according to a prenuptial agreement, receives a piece of property from her partner as compensation for waiving her claim for equalization of accrued gains between spouses (Zugewinnausgleich), for post-marital alimony, and for allocation of household goods. The Supreme Tax Court further decided that the waiver itself does not reduce the enrichment of the wife and the assessment basis for gift tax.
The Supreme Tax Court has held that the provision for a flat rate tax on gifts to employees and others only applies to benefits taxable in the hands of the recipients. The €35 limit on deductibility for gifts to non-employees has no relevance in this regard.
