In the case that was before the court, the claimants - K and Ms M - were the limited partners of a GmbH & Co. KG (a German limited partnership with a limited liability company as a general partner). On the basis of an agreement dated 29.6.2011, M transferred her stake in the GmbH & Co. KG to the claimant for no consideration. On the basis of the assessment notice dated 13.7.2012 regarding the separate assessment of the business assets for gift tax purposes, the local tax office determined the value of the stake. One month later, the claimant then sold his 80% stake in the GmbH & Co. KG to Y. On 21.10.2015, the local tax office amended the assessment notice and determined anew the value of the stake in the business assets there. The claimant appealed against this because the value that had been determined was too high.
The Munich tax court, in its ruling of 26.1.2022 (case reference: 4 K 1283/20) rejected the complaint on the grounds that it was unfounded. According to the court, the value that has to be applied to the stake is its fair market value. This can normally be derived from sales between unrelated third parties provided that the sales took place less than a year ago. If that is not possible then the net asset value method can be applied. The law does not provide for the possibility for fair market value to be derived from sales that were only concluded after the valuation cut-off date, thus the date of the gifting.
The purchase price agreed between K and Y cannot be used for the calculation of the value of the gift because the sale occurred after the gifting. It was not sufficient proof for the claimant to state that this purchase price had also been applicable on 29.6.2011. Moreover, mere negotiations would not be sufficient for this, since a sale has to actually be executed.
Outcome: In the above-mentioned case, since it was not possible to provide any proof of a lower value on the basis of sales, the local tax office was entitled to calculate the value in a different way, namely, according to the net asset value method. From the mere fact that there was a large difference between the two values it was not possible to infer that they were wrong and that the assessment notice was thus unlawful.