Teleological reduction of the so-called initial test pursuant to Sec. 13b (2) Sentence 2 Inheritance Tax Act in the case of the transfer of shares in corporations

For the purposes of inheritance and gift tax, business assets can be transferred in Germany on a tax-privileged basis. In practice, however, the tax advantage is often denied due to the hurdle of the all-or-nothing test of Sec. 13b (2) Sentence 2 Inheritance Tax Act (ErbStG), which leads to arbitrary and economically incomprehensible results. The Münster Regional Tax Court has now ruled that the initial test does not apply to the transfer of shares in corporations if the main purpose of the company is to carry out an original commercial activity.