ARGENTINA Law and Practice Contributed by: Juan McEwan and Agustín Lacoste, McEWAN
4. Family Business Planning 4.1 Asset Protection The most popular mechanism through which to seek
5. Wealth Disputes 5.1 Trends Driving Disputes
Argentine law provides legal remedies for a forced heir to make a claim if the forced share that should be allocated to them has been adversely affected. In this sense, the affected party could file a collatio bonorum claim regarding the trust fund. Case Involving Collatio Bonorum This interpretation was extended by the courts in a unique and unprecedented case in Argentina, in which the collatio bonorum was discussed in the matter of a trust created under the laws of the UK. In this case, the two daughters from the first marriage of the dece - dent and the surviving divorced spouse filed a com - plaint against the other heirs – the children from the third marriage of the decedent – with regard to the collatio bonorum of the real estate located in London and received by them as beneficiaries of a trust cre - ated in the UK by their deceased father. In respect of the collatio bonorum, the court resolved that a trust created with a view to gratuitously benefiting a forced heir of the settlor might be deemed a gift to the heirs made before the death of the decedent and thus goes into the accounting of the estate, as its content and significance exceed that permitted under inheritance law. As regards matters of private international law, the court established that – even though the trust was governed by UK law – the succession was subject to Argentine law because that was the last address of the decedent. As a general principle in succession matters, the Argentine legal system provides that suc - cession proceedings will be governed by the laws of the country in which the decedent’s address is located (as seen in this case, where the law of the decedent’s address prevailed over the law governing the trust). Sham Trust If the settlor were to receive funds from the trust, then any party with a legitimate interest could pur - sue a sham trust claim for the irrevocable trust to be declared void ab initio. In which case, those assets would be treated as if they had never left the settlor’s estate. A sham trust is the term used to refer to a trust that was set up with intentions other than those
asset protection is the trust. 4.2 Succession Planning
When it comes to family-owned companies, it is com - mon for the founder to gift their shares/interest to their heirs, reserving the economic rights for themselves – and, in some cases, the political rights as well – until their death ( usufructo vitalicio ). In relation to this, and mainly when the family-owned company holds real property or rural land, tax-free reorganisation proce - dures are commonly used to split the shares/interest between the members ( escisión libre de impuestos ) so as to avoid any tax burden, provided the following requirements are met: • the owners are prohibited from selling the reorgan - ised entities within two years of the reorganisation; and • the owners are prohibited from changing their activities within two years of the reorganisation. For family-owned companies where a reorganisation procedure is not an option owing to the company’s particulars, further planning might be suggested to achieve not only an efficient succession on the prop - erty (shares of the family company) but also the sub - sistence of the family company throughout the gen - erations. A family business constitution ( protocolo de empresa familiar ) might be an effective way to future- proof a family business. 4.3 Transfer of Partial Interest As mentioned in 4.2 Succession Planning , it is com - mon for the founder of family-owned companies to gift their shares/interest to their heirs, reserving the eco - nomic rights (and sometimes political rights) for them - selves until their death ( usufructo vitalicio ). Unless the company is located within PBA, the transfer during the founder’s lifetime is not subject to any transfer tax (the same applies to transfer at death), so there is no need for a transfer of partial interest. For income tax purposes, transferees must include the interest received at the same value as for the transferor (Sec - tion 4 of the ITL).
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