NETHERLANDS Law and Practice Contributed by: Nathalie Idsinga and Mignon de Wilde, Arcagna
4. Family Business Planning 4.1 Asset Protection
4.3 Transfer of Partial Interest For Dutch income tax, gift tax and inheritance tax pur - poses, a partial interest in an entity must be valued at no less than its fair market value at the time of transfer. A taxpayer may apply a discount for lack of market - ability and control, for example, if the shareholding constitutes a minority interest or is subject to a right of first refusal ( aanbiedingsregeling ). A blocking clause ( blokkeringsregeling ) in the articles of incorporation is generally not considered relevant for valuation pur - poses. It should be noted that case law on this issue is highly fact specific. Whether a discount can be applied depends heavily on the particular facts and circumstances and is often a subject of discussion with the Dutch tax authorities. In general, the number of disputes concerning Dutch inheritance law remains limited, although it is increas - ing. This is largely attributable to the involvement of civil law notaries in drafting wills and marital agree - ments. When interpreting wills and marital agree - ments, the intention of the parties at the time of draft - ing should be taken into account. Civil law notaries play a key role in clarifying these intentions and pro - viding context. Tax disputes have had a significant impact on the Box 3 regime. Following the Supreme Court’s ruling that the use of fictions and deemed returns in Box 3 vio - lates the ECHR, the use of deemed income for other tax purposes has also come under scrutiny. Currently, legal proceedings are ongoing regarding the notional rental value of the primary residence in Box 1. In addi - tion, since Box 3 continues to apply deemed returns in certain situations – even under the new proposed legislation – further Box 3 litigation is anticipated. 5. Wealth Disputes 5.1 Trends Driving Disputes
In the Netherlands, a STAK (see 3.1 Types of Trusts, Foundations or Similar Entities ) is frequently used in estate planning, for example, to safeguard the conti - nuity of a family business. By transferring shares in the family business (typically the top holding company) to a STAK in exchange for the issuance of depositary receipts, beneficial ownership is effectively separat - ed from legal ownership. This structure enables the transfer of economic ownership to the next generation (for example, by gifting the depositary receipts) while retaining control over the family business through the board of the STAK. The transferor can further safe - guard the continuity of the family business by making specific arrangements concerning the composition and powers of the STAK’s board after stepping down as a board member. 4.2 Succession Planning The Inheritance Tax Act 1956 and the Personal Income Tax Act 2001 provide a tax facility for the transfer of business assets and substantial shareholdings repre - senting business assets as part of business succes - sion: the business succession facility ( bedrijfsopvolg- ingsfaciliteit , or BOR). Dutch personal income tax may be (partially) deferred if certain requirements are met. Deferral is only availa - ble for the transfer of business assets (Box 1) and sub - stantial shareholdings representing business assets (Box 2). For both categories, the main requirement is that the successor is at least 21 years old at the moment of the transfer. For inheritances, no minimum age applies to utilise the BOR. Subject to strict conditions, the following inheritance and gift tax features apply to such transfers. Up to EUR1.5 million (2025) of the value of a business may be conditionally exempt from tax. For the portion exceeding EUR1.5 million, payment of tax may be conditionally deferred for up to ten years. One of the conditions is that the business must be continued for at least three years after the gift or the death of the deceased.
5.2 Mechanism for Compensation This is not applicable in the Netherlands.
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