GREECE Law and Practice Contributed by: Fotodotis Malamas, Bernitsas
4.3 Transfer of Partial Interest When a partial interest in an entity is transferred dur - ing lifetime or upon death, the fair market value of the interest, for transfer tax purposes, is not adjusted to reflect a discount for lack of marketability and control. For tax purposes, the value of a partial interest is its fair market value at the time of the transfer.
respective tax year, must be performed in Greece and must relate to its operation in Greece. The gross revenues of Family Offices are determined on a cost-plus basis. In particular, a 7% profit margin applies to the expenses incurred by them (excluding income tax), unless the revenues registered on their books are higher than the revenues under the cost- plus basis method. 4.2 Succession Planning The tax and legal environment creates impediments to business succession planning strategies in most cas - es. Potential structures used for succession should take possible future tax implications into considera - tion. The structure most commonly used to transfer wealth and control through generations is the transfer of securities by way of sale or donation, depending on their value; this method of planning is effective in cases of no or very limited liability to capital gains tax. Donations of securities are tax-exempt for amounts up to EUR150,000, after which the maximum rate is 10% for donations to first-class relatives (spouse, chil - dren or grandchildren), whereas the sale of securities incurs capital gains tax at a rate of 15%. In some cases, the older generation contributes assets to a newly established company, shares of which are donated or transferred to the next generation. In cases where the next generation has already established a legal entity, tax incentive laws may be used for the transfer of wealth to them by way of a merger without any tax implications. The transfer of shares between relatives is a common structure for preserving wealth and control across generations. However, it does not necessarily safe - guard against potential disputes among family mem - bers. One mechanism commonly used to mitigate this risk is the preparation of a shareholders’ agreement. Such an agreement provides a framework for resolv - ing issues that may arise among family members dur - ing the operation of the legal entity. Properly estab - lished mechanisms in the shareholders’ agreement can facilitate the efficient resolution of family disputes.
5. Wealth Disputes 5.1 Trends Driving Disputes
Increasing financial pressure on family members and dependants, as well as a greater willingness to hold executors and trustees to account for their actions, can mean a higher than usual level of complexity in disputes of this nature, with disputes relating to fam - ily and inherited wealth becoming increasingly com - mon. Complex family structures involving second or even third families, cross-border estates that span two or more jurisdictions, and generally more valuable estates all tend to give rise to circumstances in which there is more scope for probate and will disputes, or to contentious probate. 5.2 Mechanism for Compensation The main mechanism in Greece for compensating aggrieved parties in wealth disputes is action before the civil courts. The rules that govern civil procedures in Greece are regulated by the Code of Civil Proce - dure, which provides for pre-action interim remedies, or safety measures, over and above the ordinary pro - cedures. As an alternative, disputes may be resolved through arbitration or mediation. In principle, damages are pecuniary, although the court may take into consideration any special cir - cumstances and order the reinstatement of the former situation, or status quo ante. 6. Roles and Responsibilities of Fiduciaries 6.1 Prevalence of Corporate Fiduciaries In principle, Greek legislation does not provide for the use of corporate fiduciaries within the meaning attributed to this term in common law countries, other
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