• Service: Tax, International Executive Services, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 9/4/2013

Luxembourg - Step-up basis allowed under private banking, foundation law 

September 4: Luxembourg’s government took steps toward the development of “private banking” activities with the submission of legislation before the Parliament in July 2013.

If passed by the Parliament and enacted into law, the legislation would allow entrepreneurs and high net wealth individuals to benefit from what are viewed as innovative, flexible, and modern tools in the management and the transmission of assets and businesses.

The legislation would introduce the Luxembourg private foundation regime (fondation patrimoniale) as a new wealth management vehicle, inspired by comparable or similar regimes in other countries (Germany, Austria, Switzerland, Belgium, and the Netherlands).

Luxembourg’s fondation patrimoniale system, however, would differentiate itself from the regimes in these other countries by providing a step-up in basis for income tax purposes for individuals deciding to relocate their tax residence to Luxembourg.

Read an August 2013 report [PDF 121 KB] prepared by the KPMG member firm in Luxembourg: The Private Foundation: New innovative tools to attract entrepreneurs and high net wealth individuals in Luxembourg

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