As already announced in our last spring edition, Cash GmbHs have been facing their end for some time. Now it is official: With retroactive effect to 7 June 2013, the legislator has put a stop to this tax-avoidance arrangement within the framework of the Amtshilferichtlinie-Umsetzungsgesetz of 26 June 2013 (BGBl. I 2013 p. 1809). Since 7 June 2013, it is therefore no longer possible to contribute cash assets to a GmbH and subsequently gift them tax-free. A retroactive effect to 1 January 2013 had originally been planned but was not adopted. In recent years, such gifts were tax-free as long as the cash assets were held as a fixed-term deposit at the time of the gift, since bank accounts did not count as detrimental administrative assets within the meaning of § 13b Abs. 2 ErbStG. Under the current amendment, a company's financial assets qualify as detrimental administrative assets for inheritance and gift tax purposes if they exceed 20% of the company's value — operational liabilities are to be deducted beforehand (§ 37 Abs. 8 ErbStG new version).
Frequently asked questions
Frequently asked questions
When was the Cash-GmbH model abolished by law?
With the Amtshilferichtlinie-Umsetzungsgesetz (Mutual Assistance Directive Implementation Act) of 26 June 2013 (BGBl. I 2013 p. 1809), the legislator ended the Cash-GmbH model retroactively as of 7 June 2013. An originally planned retroactive effect to 1 January 2013 failed during the legislative process. Since then, it has no longer been possible to contribute cash assets to a GmbH and subsequently gift the company tax-free.
Why was gifting a Cash-GmbH previously possible tax-free?
Until the law was amended, bank balances and fixed-term deposits did not count as harmful administrative assets within the meaning of section 13b (2) ErbStG. If cash was held as a fixed-term deposit in a GmbH, the shares could be transferred tax-free by applying the inheritance and gift tax relief provisions for business assets. This arrangement was known as a 'Cash-GmbH'.
How are a GmbH's financial assets now treated for inheritance and gift tax purposes?
Under Section 13b ErbStG in its new version, a company's financial assets qualify as harmful administrative assets to the extent they exceed 20% of the company's value. Business liabilities must first be deducted from the financial assets. If the resulting amount exceeds the 20% threshold, the gift and inheritance tax relief no longer applies to that portion.
What qualifies as financial assets under the new rules?
Financial assets include in particular cash holdings, bank balances, fixed-term deposits, sight deposits and comparable receivables. Before the legislative change, these items were not treated as administrative assets and could therefore be used for tax-free transfers. Under the new rules, they must now generally be included in the administrative assets test.
What is the practical significance of the 20% threshold?
If the financial assets, reduced by business debts, remain below 20% of the company value, the tax exemption for business assets is preserved. If the threshold is exceeded, the surplus is treated as harmful administrative assets and is not transferred under the preferential regime. Forward-looking liquidity planning within the company is therefore essential prior to gifts or in the event of inheritance.