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view in original language (German)The transfer of privately held real estate to a corporation raises numerous tax and legal issues. In addition to the direct tax implications, particular attention must be paid to real estate gains tax, social security law considerations, and issues related to succession and estate planning.
Using practical case studies, this guide examines various structuring options and their tax implications. The cases address, among other topics, the contribution of real estate to corporations, the distinction between personal and business assets, restructurings, estate planning, and mixed gifts. The solutions highlight the tax risks and opportunities that arise in practice and explain how current case law and administrative practice should be taken into account.
The case studies are available free of charge. The detailed sample solutions, including legal assessments, tax analyses, and calculations, can be purchased separately.
A holds 100% of both Land AG and Werk AG. In 2023, Land AG purchases a property slated for demolition for CHF 1.9 million (400 m²). Werk AG has the development carried out by a third-party company. Upon the sale of the condominium units in 2026, Land AG sells the land share for each unit, while Werk AG sells the building structure of the unit. According to the notarized purchase agreement, Land AG received a total of CHF 2 million, while Werk AG received CHF 5.7 million—it bore the construction costs of over CHF 3.4 million and developed the project. An external real estate agent was commissioned to market and sell the units, charging a commission of 2% per unit sold (a total of CHF 154,000).
Questions
A holds 100% of Land AG, Werk AG, and Bau AG. In 2023, Land AG purchases a demolition site for CHF 1.9 million (400 m²). Werk AG has the development carried out by its sister company, Bau AG. Upon the sale of the condominium units in 2026, Land AG sells the land share for each unit, while Werk AG sells the building. According to the notarized purchase agreement, Land AG received a total of CHF 2 million, while Werk AG received CHF 5.7 million—it covered the **construction costs **of over CHF 5.5 million, which were invoiced to it by Bau AG for the construction of the building. An external real estate agent was commissioned to market and sell the property, charging a commission of 2% per sold unit (totaling CHF 154,000).
Question
How is the tax office likely to proceed in such a scenario?
A holds 100% of both Land AG and Werk AG. In 2023, Land AG purchases a demolition site for CHF 1.9 million (400 m²). Werk AG has the development carried out by a third-party company. Upon the sale of the residential units in 2026, Land AG sells the land portion for each residential unit, while Werk AG sells the building structure of the respective residential units. According to the notarized purchase agreement, Land AG received a total of CHF 2 million, while Werk AG received CHF 5.7 million—it had planned and built the project entirely on its own. An external real estate agent was commissioned to handle the marketing and sale, charging a fee of 2% per floor unit sold (a total of CHF 154,000).
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