Gift tax class for the initial endowment of family foundations

Two clear - and for the practice pleasing - decisions on the tax class for the establishment of family foundations: The Rhineland-Palatinate tax court essentially states that only beneficiaries of the family foundation are to be taken into account when determining the “most remote beneficiary” within the meaning of Section 15 (2) sentence 1 ErbStG (tax class privilege) and thus denies the question disputed in the literature as to whether beneficiaries (cf. Section 87c BGB) are also to be taken into account. It remains to be seen whether the BFH will agree with this in the pending appeal proceedings; until then, caution is still required when drafting (founding) articles of association for family foundations - even though there are possible structuring options - and, in case of doubt, prior consultation with the tax office is strongly recommended.