For business succession within family circles, the tax authorities have a special business succession regulation: the BOR. This allows you as successor to enjoy a significant tax advantage. During the succession process, it is therefore wise to have a financial expert determine the optimal tax burden.
What is the business succession regulation?
The BOR is a regulation of the Inheritance Act, which aims to allow business successions to take place without all kinds of financial obstacles. The BOR applies to the inheritance of business assets. There is a distinction here:
- The first is the inheritance of business assets through the business succession of a "family business," whose owner retires or moves to another position;
- The second is inheriting business assets, when you take over the family business from a deceased owner.
How does the business succession regulation work?
How much tax benefit you get depends on the going-concern value and liquidity value. The going-concern value is the value of the business, assuming the current situation and continuation without change. The liquidation value is the total estimated sales value of all assets, such as inventory and machinery. The Tax Office assumes the higher value in calculating the exemption.
For convenience-and because the going-concern value is usually higher than the liquidation value-we look at a business succession situation with a higher going-concern value.
In this case, you get 100% exemption over an amount of €1.5 million (2025) and for the assets exceeding this amount, you get 75% exemption. In addition, you can get deferred payment of inheritance tax on that 17% above the established tax threshold. You may then take 10 years to repay the inheritance tax due, with interest.
Conditions BOR
The business must be an active, ongoing business. Do you get the business through an inheritance? Then there is no minimum age for the transferee. Are you getting the business through a gift? Then there is a minimum age of 21 for the transferee to use the BOR.
Furthermore, the previous owner must have owned the business for at least 5 years. Did the owner pass away? Then this is 1 year.
Finally, the business should not stop right after the acquisition. How long you must continue with the business depends on when you got the business.
After January 1, 2025
You must continue to operate the business for at least 3 years. Have you acquired shares in a business? Then you must continue to own those shares for at least 3 years and the business must continue its operations for 3 years.
Before January 1, 2025
You must continue in business for at least 5 years. Have you acquired shares in a business? Then you must continue to own those shares for at least 5 years and the business must continue its activities for 5 years.
Austerity of the BOR
The business succession regulation is under fire. The secretary of state for finance has put forward proposals in 2020 to abolish, or greatly relax, the BOR so as to create a more level playing field between schemes within the European Union.
The business succession scheme will remain in place for the time being, although it will be adjusted in stages. According to the Tax Office, these are the changes as of January 1, 2026:
- Are you getting a business from an entrepreneur who started the business later than 2 years after his or her state retirement age? This entrepreneur must have been the owner of the business for longer at the time of gift or inheritance (longer ownership requirement). Otherwise, you cannot use the BOR. Now for this situation, the normal possession requirement of 5 years when donating a business and 1 year when inheriting a business applies.
- Have you previously owned the business you are getting? If so, you can no longer use the BOR.
- Are you getting shares in a business? You will soon be able to use the BOR only for ordinary shares. No longer for profit-sharing certificates or options on shares, for example. The shares must represent at least 5% of the value of the business.
- It will be easier to restructure the business you get. Then you can split or merge the business, for example, without losing the tax benefit of the BOR because you don't meet the ownership or continuation requirement.
With these changes, the government wants to make it easier to continue with a business. It should also make it more difficult to abuse the BOR. For example, if someone still buys a business at a higher age in order to avoid gift tax or inheritance tax.
