Which value counts for the compulsory portion – and as at which valuation date.
The compulsory portion is a monetary claim.
Where a business forms part of the estate, it must be “precisely described and valued” (§ 778(1) ABGB, Austrian Civil Code).
Persons entitled to a compulsory portion hold a monetary claim (§§ 761, 763 ABGB) – for heirs, often a considerable payment burden.
Which value is to be applied – and as at which valuation date?
Valuation standard
According to recommendation KFS/BW 1 E 9 (the Austrian professional standard for business valuation), the market value applies as a matter of principle (E 9 para. 54).
Market value: what a buyer would pay.
The yardstick is the ordinary value of the estate – subjective values are excluded:
- Sale assumed – because the compulsory portion is a monetary claim (E 9 para. 54)
- Real price factors – for shareholdings, control and transferability count (E 9 para. 55)
- Compensation clauses – to be assessed separately in the articles of association (E 9 para. 54)
Different from severance compensation: There the objectified value applies – without minority discounts (E 9 paras. 39, 43).
The valuation date: date of death – or earlier.
The value of a business depends on the valuation date – and this is laid down by law:
- Estate – valued as at the date of death (§ 778(2) ABGB)
- Gifts – may be added back in certain circumstances (§§ 782, 783 ABGB)
- Date of the gift – value then adjusted by the consumer price index (§ 788 ABGB)
Practical tip: For lifetime transfers, document the value at the date of transfer in a comprehensible manner.
Often overlooked: the owner as a value driver.
Transferable earning power
Contributions to success that depended on the deceased count only to the extent that they are transferable (para. 171, 175 et seq.).
No continuation without the owner?
Then the business value regularly corresponds to the liquidation value (KFS/BW 1 para. 183).
What is valued is what can continue to be earned without the previous owner.
From our engagements: transfer of a family business
Family business in the Salzkammergut: valuation for the transfer of a trade business to the next generation. Calculation of compulsory portions for three siblings and tax-optimised structuring of the transfer.
Tax-optimised transfer implemented
Anonymised example – discretion is our highest priority.
Have the estate professionally valued.
Whether compulsory portion, transfer or division of the estate – we clarify your situation in a free initial consultation.