Budget Day: business succession scheme retained, but adjusted

King Willem-Alexander read the Speech from the Throne yesterday, the third Tuesday of September.

On Budget Day, the caretaker government announced its most important plans for family, housing, and business. Plans that could have significant financial consequences, including for you.

The government is addressing an undesirable tax-saving scheme for real estate transactions. And the business succession regulations in the Inheritance Tax Act are being amended. These and other measures are included in the 2024 Tax Plan package, which State Secretary for Finance Marnix van Rij submitted to the House of Representatives on Tuesday during Budget Day.

Earlier this year, the government published a proposal for consultation to address an undesirable tax-saving structure in real estate transactions. This involves using a share transaction to avoid VAT and transfer tax on the transfer of new real estate. Following responses to the online consultation and a meeting with the real estate sector, the government has amended the proposal. The proposal, which includes changes to transfer tax, will take effect on January 1, 2024, and includes a transitional arrangement.

Box 3
The tax-free allowance in Box 3 (€57,000) will not be indexed next year, and the tax rate in Box 3 will increase from 32 to 34 percent in 2024. This means that people with assets will be taxed much more heavily. The Box 3 system will be improved by considering more forms of assets as bank deposits. Money in a notary's escrow account and membership rights in an owners' association will no longer be considered other assets but bank deposits. Certain mutual claims and debts will also no longer be included in Box 3. These two measures will take effect retroactively from January 1, 2023.

Business succession scheme
The government has chosen to retain the business succession scheme in the Inheritance Tax Act, but to better align it with its purpose in several areas. This will prevent a business's continued existence from being jeopardized by a business transfer. Real estate leased to third parties will no longer be eligible for the scheme as of January 1, 2024. The general exemption for the business succession scheme will increase from €1.2 million to €1.5 million as of January 1, 2025. Simultaneously, the existing exemption of 83 percent above €1.5 million will be reduced to 70 percent. This will ensure that the benefits of the scheme are distributed differently.

15 bills
This year's Tax Plan 2024 package consists of 15 bills . The House of Representatives' Finance Committee will now consider the bills in writing, so they can be debated in plenary session in mid-November. The Senate can then proceed with the bill.

Major concerns
The employers' organization VNO-NCW has expressed significant concerns about the proposed plans. The employers' organization does not want wage increases or tax increases for businesses, as these lead to higher prices, lower profits, and lower contributions to the treasury. First earn, then distribute. Ingrid Thijssen, chair of the employers' organization VNO-NCW, stated that the government itself must make cuts and that businesses are not ATMs to pay.

We show you the way
Want to know how these financial consequences can be beneficial for you, not detrimental? Call us at +31 (0)10 44 53 777 or email service@maesnotarissen.nl. We're happy to guide you.