The issue of succession at family businesses

11 July 2023, Munich. Inheritance and gift tax is one of the biggest tax burdens in the transfer of company shares to successors. These and other challenges due to the tax environment were recently reported by 851 family businesses surveyed by the ifo Institute on behalf of the Foundation for Family Businesses, 43 per cent of which are facing a generational change within the next three years.

Taxes are burdens

With regard to the tax framework, the survey comes to the following key conclusions: A change in the exemption of business assets would have a negative impact on the willingness of 67 per cent of respondents to pass shares in the family business on to the next generation and 72 per cent would be less willing to invest. Currently, 67 per cent of the family businesses surveyed rate the tax and duty burden on employees, 63 per cent of companies income tax and 61 per cent rate inheritance and gift tax as high to very high.

Scientific database FamData served as the starting point for the survey

The results are part of a representative survey of 851 companies conducted by the ifo Institute on behalf of the Foundation for Family Businesses. The FamData database, Germany’s leading scientific database on family businesses, was used as the source of the data.

FamData is Germany’s leading scientific database on family businesses. It contains data from more than 12,000 companies, half of which are family businesses. This makes it a powerful tool for research into family businesses.