Taxation on inheritance and donations – what will change in 2018?

Exemption from tax will be expanded to also apply to inheriting companies – sole proprietorships. The change also concerns inheriting by informal partners.

One should remember about two conditions that have to be met: notifying a competent tax office and running the company that has been passed on for five years after the moment of obtaining it.

Succession always allows to maintain continuity of company operations and to make use of its edges and renown it has built through years. However, inheriting it varies depending on the legal structure it has.

Currently, it is not possible to inherit a company run as a sole proprietorship.

At the moment of an entrepreneur’s death, the company is removed from the register, i.e. its NIP (tax number), REGON (business registry number), all licences and concessions become invalid. Powers and attorney and agreements expire. Even though rights and obligations are transferred onto the heirs, they are not treated as entrepreneurs. They are obliged to pay rent or gas and energy and take over obligations arising out of agreements with employees. Yet, they first need to apply for a decision on acquiring inheritance or a succession certificate, and then set up a new business and one by one take over company assets.

Managing company assets is possible only when inheritance proceedings are over. You may also consider transforming into a commercial law company. The changes planned for next year introduce the institution of a custodian, appointed by court, who manages the enterprise within the scope of ordinary management until the heirs obtain inheritance. He / she also administers the bank account up to a certain amount. At the same time, administrative decisions issued with regard to the company and entitlement to public aid do not expire.

Shares in a civil company is not subject to inheriting. Unless the Articles of Association give the heir possibility to enter into the agreement. Then they do not have a choice. The third option is introducing a succession clause, in which case entering a company depends on the will of the heir.

With respect to other partnerships, you should refer to both the provisions of the civil code and the code of commercial companies.

Continuation of activity of a registered partnership is possible after a partner’s death if the Articles of Association stipulate it or when the remaining partners immediately adapt such resolution.

The heir of a partnership may enter the company if they work at a profession allowing continuation of its activity.

A limited liability partnership is dissolved after the general partner’s death – unless the Articles of Association or a shareholder’s meeting decide otherwise, whereas when the limited partner dies, their shares are passed on to the heir.

In a limited liability company, shares are, as a rule, inherited. You may, however, introduce certain limitations in the Articles of Association. Similar to a joint stock company, where the Articles of Association may state the necessity to redeem shares and pay the heir.