Lease private property to own company

The pitfalls of the Wiesbaden Model and the Berlin Testament

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In this video, Jessica Vetter, Lawyer for Tax and Criminal Law at the law firm caspers mock in Koblenz, presents important aspects of tax optimization for entrepreneurs, in particular in connection with real estate in private assets that are leased to one's own company.

• Tax optimization and corporate split-ups: Entrepreneurs who hold real estate in their private assets and wish to lease it to their own company risk, without expert advice, a corporate split-up that can lead to substantial taxes.
• Consequences of splitting a business: Splitting a business involves dividing a company into a holding company, which holds the essential operating basis, for example a property, and an operating company, which is granted the right to use the property.
• The Wiesbaden Model as a solution: To avoid splitting the business, the Wiesbaden Model can be applied, in which spouses hold different controlling interests in the operating and holding companies, so that there is no personal interlocking, since neither spouse has a controlling interest in the other company.
• Berlin Testament and its consequences: In the event of the death of one of the spouses, the Berlin Testament, in which the spouses appoint each other as sole heirs, can lead to the unwanted splitting of the business, since the surviving spouse now holds the controlling shares in both companies.

The statements represent initial information that was current for the law applicable in Germany at the time of initial publication. The legal situation may have changed since then. Furthermore, the information provided cannot replace individual advice on a specific matter. Please contact us for this purpose.