NETHERLANDS Law and Practice Contributed by: Willemijn van Duren and Rowena Zee, Arcagna
1. Contemporary Cultural Considerations in Succession Planning 1.1 Social and Cultural Attitudes In the Netherlands, many high net worth families take a “stewardship” approach to succession planning: wealth is viewed as family capital that should be pre- served and managed for the benefit of current and future generations, rather than fragmented or con- sumed. This often goes hand in hand with a stronger focus on family governance and continuity, including clear decision-making rules and alignment between branches of the family. The tension between freedom of testation and fam- ily protections remains a live topic: there have been many calls for abolition of the forced share for children ( legitieme portie ), however, a recent report found that the concept of abolition is not as supported as previ- ously thought. For family businesses, two parallel trends are com- monly seen. First, families pursuing intergenerational business succession frequently incorporate a Dutch foundation with fiduciary purposes (S tichting Admin- istratiekantoor , STAK) to separate economic owner- ship from voting control, allowing the next genera- tion to participate economically while the founder can retain influence during the transition. Second, where there is no suitable successor (or where the next gen- eration is unwilling to run the business), families are increasingly open to professionalising governance and considering a partial or full sale to the market, including private equity, while seeking to safeguard the company’s legacy and employee continuity. Business transfer planning is also shaped by the political sensitivity around tax incentives for family business continuity. Recent parliamentary debates on reforms to the Dutch business succession relief ( bedrijfsopvolgingsregeling , BOR) have been post- poned and seem to be, for now, off the table. A further trend, particularly among the next genera- tion, is a growing focus on contributing positively to society. This is reflected in increased attention to responsible ownership and philanthropy, and more active collaboration with charitable initiatives along-
side (rather than instead of) long-term family wealth preservation. 1.2 Wealth Profiles and Industry Influences Private wealth in the Netherlands is relatively diverse, and no single “old money”, “new money” or indus- try cohort consistently dominates client expectations or planning strategies. Instead, planning is typically driven by the composition of the family’s assets (eg, an operating family business, real estate and/or liq- uid investment portfolios) and by family governance dynamics, including the preferred balance between control and early economic participation by the next generation.
2. Residency and Domicile for Purposes of Wealth and Estate Planning 2.1 Determining Domicile Concept of Domicile
The Netherlands does not generally apply a common law concept of “domicile” as an all-purpose connect- ing factor for estate planning. Instead, different con- necting factors apply depending on the topic, most commonly (i) tax residence (for Dutch gift and inherit- ance tax) and (ii) habitual residence and/or nationality (for succession and family law matters). Gift and Inheritance Tax For Dutch gift and inheritance tax, exposure is primar- ily determined by whether the donor (gift tax) or the deceased (inheritance tax) qualifies as a resident of the Netherlands for tax purposes at the time of the transfer. Tax residence is assessed based on the full factual picture and whether there is a durable per- sonal connection with the Netherlands (eg, having a home available, where family life is centred, work and economic interests, banking and memberships/ subscriptions). Where the donor/deceased is resident (or deemed resident under specific emigration rules), Dutch gift/inheritance tax can apply to worldwide transfers. If the donor/deceased is not (deemed) resi- dent of the Netherlands, no Dutch gift or inheritance tax is levied over Dutch situs assets.
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