Tax succession planning for operating companies with real estate

Entrepreneurs often face the challenge that it is difficult to finance the takeover of their operating company by a successor. This is particularly the case if the company holds operating or investment properties and has therefore become very "heavy".

The operating company can be made lighter by splitting the business and properties into two companies. This makes it easier for a successor to finance the takeover. However, such demergers are generally not completely tax-neutral and must therefore be carefully planned.

However, particularly in monistic cantons, i.e. cantons in which the often considerable increase in value of the property is subject to (cantonal or communal) property gains tax, a non-tax-neutral division can be quite attractive and should therefore be considered.

In any case, careful tax planning is essential for succession planning.