POLAND Law and Practice Contributed by: Wiesław Oleś, Krzysztof Rysz, Joanna Sarkowicz and Kamil Kania, Oleś, Rysz, Sarkowicz
Valuation of Inherited Assets Inherited assets are valued at their market value as at the date on which the tax obligation arises (in most cases, the date of registration of the deed of succes- sion or the date on which the court decision confirm- ing the acquisition of the inheritance becomes final). Cost Carryover Basis Poland does not have an equivalent to the US IRC Section 104 step-up in basis. When it comes to capital gains tax, heirs generally step into the shoes of the deceased regarding the cost basis (so-called historical cost carryover basis). Therefore, the cost basis is not adjusted to the fair market price of the acquired prop- erty at the date of the decedent’s death. For instance, if the deceased originally purchased a property for PLN100,000 and it was worth PLN200,000 at the time of their death, the heir who sells it for PLN250,000 will be taxed on a PLN150,000 gain. Sale of Inherited Real Estate and Tax Exemption However, the income from the sale of inherited real estate may be tax-free provided that the sale is not conducted as part of the seller’s business activity. This exemption applies if the sale occurs after a five-year holding period, which is calculated from the end of the calendar year in which the property was originally acquired. Tax authorities state that the aforementioned period includes not only the period of the heir’s ownership, but also the period it was held by the deceased. In practice, it means that in some cases the heirs can sell the real estate immediately upon inheritance with the tax exemption.
companies, to a designated heir upon the testator’s death. This prevents the automatic creation of frac- tional co-ownership among all heirs, which would oth- erwise require unanimous consent for management and potentially lead to a lengthy judicial division of assets. To maintain operational oversight during the transition, testators may appoint an executor ( wyko- nawca testamentu ) to manage the estate and fulfil testamentary obligations until the formal division is complete. Succession Management for Sole Proprietorships For enterprises operating as sole proprietorships, Pol- ish law provides a dedicated “succession manager” mechanism to ensure business continuity. A manager may be appointed by the entrepreneur during their lifetime or by the heirs post-mortem under specific statutory conditions. This appointment prevents the abrupt termination of the business, preserving essen- tial operational elements such as employment con- tracts, commercial agreements and public law permits that would otherwise expire upon the owner’s death. The Rise of Family Foundations The introduction of the Polish family foundation in 2023 has transformed planning for high net worth families by providing a separate legal entity for long- term asset protection. This structure effectively sepa- rates ownership and management from the enjoyment of benefits, protecting the estate from fragmentation among multiple heirs. While designed for succession, its rapid adoption – exceeding 3,000 registrations in under three years – is also largely attributed to its sig- nificant tax efficiency. The foundation’s activities are statutorily restricted to capital accumulation and asset management (investments and disinvestments), gov- erned by a board and the founder’s specific articles of association. Closed-End Investment Funds While closed-end investment funds ( fundusz inwesty- cyjny zamknięty , FIZ) are primarily designed as invest- ment vehicles, they are also sometimes utilised as sophisticated tools for estate planning and wealth consolidation that provide a layer of legal protection and professional management beyond simple asset ownership. This arrangement allows for combination of control by the holders of investment certificates
6. Lifetime Succession Planning Mechanisms 6.1 Common Planning Techniques Wills and Testamentary Legacies
The will remains the foundational succession tool in Poland, though it is often insufficient for complex busi- ness estates without additional mechanisms. A key instrument for targeted succession is the “legacy by vindication” ( zapis windykacyjny ), which enables the direct transfer of a specific asset, such as shares in
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