The effect of inheritance tax on companies

The Süddeutsche Zeitung reports (as do many other papers) that Theo Müller is going to leave Germany for Switzerland, in order to avoid inheritance tax when he leaves his business to his children. The business is a family business, Müller Milch, that has done very well – it’s well known in Britain for Müllerice, Müllerlite and its TV advertising, slightly different from the German ads. To quote the English site:

bq. It’s a fair bet that when yogurt loving Ludwig Müller first established his little Bavarian village dairy back in 1896, he could scarcely have imagined the staggering success it was to become. For today his grandson, Theo, runs a business which last year turned over £625 million and employed 2,400 people.

It’s not only Germany that makes it expensive to leave a company to heirs. But Switzerland, Austria and Italy don’t charge inheritance tax in this situation.

The German inheritance tax system is being challenged in the courts as unconstitutional. If it is changed, it will be even harder on companies than it is today, when companies are treated more favourably than individuals.

Here’s an article in English about the owner of the Stollwerck chocolate company.

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