Inter Vivos Transfers of Ownership in Family Firms
This paper examines the determinants of inter vivos (lifetime) transfers of ownership in German family firms between 2000 and 2013. Survey evidence indicates that owners of larger firms, and firms with strong current business conditions, transfer ownership at higher rates than others. When a firm’s self-described business condition improves from “normal” to “good” the likelihood of an inter vivos transfer increases by 46 percent. Inter vivos transfer rates also rose following a 2009 reform that reduced transfer taxes. These patterns suggest that transfer taxes significantly influence rates and timing of inter vivos ownership transfers.
We would like to thank Sebastian Escobar, Ben Lockwood, Dirk Schindler, Thomas Stratmann, Agnes Strauss, Liya Palagashvili, the participants of CESifo Public Sector Economics conference (Munich 2016), European Association of Law and Economics (Vienna 2015), Congress of the International Institute of Public Finance (Dublin 2015) and Public Choice Society Meetings (San Antonio 2015), and seminars at the ifo Institute, Paris School of Economics, University of Michigan, Swiss Economic Institute at the ETH Zurich, Centre for Business Taxation at Oxford University, University of Bayreuth, and University of Munich for their helpful comments. We are grateful to the Foundation of Family Businesses, on whose behalf we conducted a survey on inheritances, inter vivos transfers, and transfer taxation (the Inheritance and Gift Tax Survey – IGTS) among owners of family firms in February and March 2014. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
James R. Hines & Niklas Potrafke & Marina Riem & Christoph Schinke, 2019. "Inter vivos transfers of ownership in family firms," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 26(2), pages 225-256, April. citation courtesy of