ARTICLE · 10 JULY 2012

Succession Planning And Tax Optimisation: What's New?

MLL Meyerlustenberger Lachenal Froriep Ltd

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For sole proprietorships, succession is usually established by selling the company’s assets and liabilities (known as an "asset deal"). In terms of civil law this means that the seller's company is liquidated.

SwitzerlandTax

Barbara Stillhart-Zimmermann

1. Partnerships (sole proprietorship, general or limited partnership)

1.1. What happened before?

For sole proprietorships, succession is usually established by selling the company's assets and liabilities (known as an "asset deal"). In terms of civil law this means that the seller's company is liquidated.

The difference between the sales price and the taxable value of the sold assets qualifies as taxable liquidation surplus and is subject to income tax as well as social insurance contributions. Often the release of hidden reserves exponentially increases the tax burden as it puts the taxpayer into a higher tax bracket. Depending on the canton, the tax burden (including social insurance contributions) could until now amount to as much as 50%.

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